MASTER 

NEGATIVE 
NO.  94-821 39 


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Author: 


Hydraulic  society 


Title 


"Management  and  the 
high  cost  of  living" 


Place 


[New  York] 


Date 


[1919] 


Q4•9^^^l3^-p^ 


COLUMBIA  UNIVERSITY  LIBRARIES 
PRESERVATION  DIVISION 

BIBLIOGRAPHIC  MICROFORM  TARGET 


MASTER   NEGATIVE   # 


ORIGINAL  MATERIAL  AS  FILMED  -    EXISTING  BIBLIOGRAPHIC  RECORD 


'  PI»<!TNfcbS 


262 
H99 


Hydraulic  society • 

"Management  and  the  high  cost  of  living"  as 
developed  at  the  meetings  oi"  the  Hydraulic 
society  and  the  Compressed  air  society,  Septem- 
ber 2  5-26,  1919  at  Lafayette  hotel,  Buffalo, 
N.  y.   jNow  York,  1919, 

cover-title,  A-D,  44-H,  26-C-32-C  numb.  1. 

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"MANAGEMENT  AND  THE  HIGH  COST  OF  LIVING" 


as  dsvelopel  at  the  meetings  of 


THE  BYDHAULIC  SOCIETY 


and 


THE  COMPRESSED  AIR  SOCIETY 


September  35-36,  1919 


at 


Lafayette  Hotel,  Buffalo,  N.  Y, 


1)2.G2. 


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Columbia  ©nitietfttp 
m%€tlpoflrt»$ork 


LIBRARY 


School  of  Business 


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"MANAGEMENT  AND  THE  HIGH  COST  OF  LIVING" 


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THE  HYDRAULIC  SOCIETY 
President  -  C,  W.  Pank, 

Vlce-Pres't, Fairbanks, Morse 
&  Co.,  Chicago* 

THE  COMPRESSED  AIR  SOCIKTY 
President  -  George  Doubieday, 

President, XngersolLRand  Co«i 
New  York, 


Offices  of  the  tuo  Societies: 


30  Church  Street,  New  York, 


After  November  1,  1919; 


450  Fourth  Avenue,  New  York* 


C*  H,  ROHRBACH, 

Secretary. 


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ttiemhPTft  of^^1•>?i^^^i^®  c^^®.  recipients  of  thifi  record  who  ace  .not 
Slscussions     a  lilf'^^/tl''^^  ^^  it«tify  the  participants  in  the 
gi?en  b^lS?  ^^^  present  at  the  two  meetings  is 


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THE  HYDRAULIC  SQCT1«:TY  .  SEPTEMBER  25,  IQ7Q 

Anderson,  L,  B. ,  Sec.  &   Treas*, 

Advance  Pomp  &  '-ompressor  Oo*. 
Battle  Creek,  Mi.ch. 

Cone,  J.  D*,  AssU.  Cxen»l,  Salee  Manager. 

A«  S.  Cameron  Steam  Punp  Works,  New  York^ 

Emeny,  F.  J^,  Chief  Engineer, 

The  Deming  Co*,  Salem,  Ohio 

Fishwick,  E.  T*,  General  Sales  Manager,  ' 

Worthington  Pump  and  Machinery  Corp.,  New  York* 

Gardner,  J*  W,,  President 

Gardner  Governor  Co%,  Quinoy,  111* 

Hall,  R.   £•,  Vioe  President, 

The  Goulds  Manufacturing  Co.,  Chicago* 

Hartlieb,  d.   F.,   Vioe  President, 

Piatt  Iron  Works,  Dayton,  Ohio* 

Heermans,  T*  M. .  Hydraulic  Departrrent, 

Allis-Chalmers  Manufacturing  Co.,  Milwaukee,  Wis* 

MoHugh,  A.  L.,  Chief  Engineer, 

The  Goulds  Manufacturing  Co.,  Seneca  Falls,  N*  Y. 

Newton,  N,  A*,  Sales  Manager, 

National  Transit  Pump  &   Machine  Co.,  Oil  City,  Pa. 

Nye,  R*  G*,  Production  Manager, 

Buffalo  Steam  Purtgp  Co.,  Buffalo-  N,  Y. 

Pank,  C*  W.,  Vioe  President, 

Fairbanks,  Morse  &  Co.,  Chicago. 

Peterson,  A.  G.,  Sales  Manager, 

Buffalo  Steam  Pump  Co.,  Buffalo,  N,  Y* 


(B) 


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Raynolds,  W.  M,, 

Worthington  Pump  and  Machinery  Corp.,  Holyoke,  Mass 
Wall,  J,  W«,  Secretary 

Gardner  Governor  Co.,  Quincy,  111. 

Watson,  H.  L.,  Sales  Manager 

DeLaval  Steam  Turbine  Co..  Trenton,  N.  J. 

Wendt,  Edgar  F. , 

Buffalo  Steam  Punp  Co.,  Buffalo,  N.  Y. 

Wendt,  H.  w.,  Treaanrer 

Buffalo  Steam  Punp  Co.,  Buffalo,  N.  Y, 

West,  E.  D.,  General  Sales  Department, 
Fairbanks,  Morse  &  Co.,  Chicago. 

Wltroer,  R,  C.,  General  Managsr, 

Blake  Pump  &   Condenser  Co.,  Fitohburg,  Mass. 


I 


\ 


THE  COMPRESSED  AIR  snnTITTV  -  SEPTEMBER  26.  ;^Q]g 

Albin,  L.  D.,  General  Sales  Manager. 
Ingersoll-Rand  Co.,  New  York 

Blackwood,  A,  E,,  Manager, 

Sullivan  Machinery  Co.,  New  York 

Copeland,  P.  K.,  President, 

Sullivan  Machinery  Co.,  Chicago 

'^^"'p?;^^**  Manager  Compressor  &  Engine  Sales  Division. 
Chicago  Pneumatic  Tool  Co.,  Chicago      «*vi8ion, 

Feldbftsh,  H.  A., 

worthington  Punp  &  Machinery  Corp.,  Cinolnnati 

Gardner,  J.  w..  President 

Gardner  Governor  Co.,  Quincy,  111, 

Jones,  F.  H.,  Vice  President 

Worthington  Pump  and  Machinery  Corp.,  New  York 

Eiefer,  R.  A.,  Manager 

Gardner  Governor  Co.,  New  York 

Miller,  H.  H.,  Manager  Laidlaw  Sales, 

Wbrthington  Punp  and  Machinery  Corp. ,  Cincinnati 

-C- 


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Chicago  Pneumatic  Tool  Co.,  Chicago 

^^"ml/ch^r-  ^'^^fSer  Engine  Department 

Allie^Chalmers  Manufaoturiag  C?"  m;aukee 

^^°^Buf;  c^'  ^^°'^*^'y-Trea8urer 
Bury  Compressor  Co.,  Erie,  Pa. 

^^11  n  'J*  W.,  Secretary 

Gardner  Governor  Co,,  Quinoy,  111, 

Walsh^  H.  T«,  General  Salea  ManAc«,. 
Sullivan  Machiner J  Co  f,"aifa|o 


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Of  Ht  Rohrbaoh,  Secretary 

30  Church  Street,  New  York 

after  November  1,  1919:  450  Fourth  Avenue, 


New  York 


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(D) 


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President  Pank:  Gentlemen,  I  think  that  the  Plan  and  Scope  Committee 
and  the  Secretary  have  planned  something — the  President  has  not 
been  taken  into  their  confidence*   The  heading  appearing  before 
me  is  ■•Management .  •  I  find  that  the  Plan  and  Scope  Committee 
and  the  Secretary  are  certainly  managing  the  Society*  So, 
Mr,  Secretary,  perhaps  you  can  enlighten  us  as  to  what  *'  is  ex- 
pected under  this  heading* 

Secretary  Rohrbach:  Mr.  Chairman  and  Gentlemen,  a  month  or  do  ago 
the  Plan  and  Scope  Committee  of  the  Compressed  Air  Society  had 
a  meeting,  at  which  time  Mr#  Jones  brought  up  what  he  thought 
would  be  a  very  good  topic  for  our  next  meeting;  and  your  Plan 
and  Scope  Committee  agreed  with  him  that  it  was  a  live  topic  for 
discussion.   I  christened  it  "Management  and  the  High  Cost  of 
Living",  60  as  to  have  a  concrete  heading  for  our  program. 

TERMS  DEFINED 

In  tsilking  the  proposition  over,  Mr«  Jones  and  Mr#  Albin 
defined  the  business  situation  today  as  being  one  where  there 
are  really  three  partners  in  every  Individual  business* 

First,  there  is,  of  course,  "Capital" — capital  is  getting 
a  certain  return  which,  in  most  cases,  has  been  augmented  by  war 
conditions  and  the  subsequent  train  of  high  prices,  so  that,  as 
a  general  proposition,  looking  at  the  industrial  situation  as  a 
whole,  you  will  find  that  the  return  on  capital  has  gone  up 
relatively  as  much  as  general  living  expenses  have  gone  up. 

The  next  division  or  partner  they  defined  as  "Labor"—- 
meaning  by  that  all  parts  of  the  personnel  of  an  organization 
that  come  under  the  daily  wage  plan  of  payment.  Labor,  as  the 
^J®^)Js^ion  we  have  just  had  and  as  can  be  seen  from  the  news  of 
the  day,  is  getting  its  own,  and  some  may  think  more  than  getting* 
its  own« 

The  third  partner  is  the  remaining  personnel,  not  included 
under  "Labor",  and  which  we  have  termed  "Management " •   That  takes 
in  everybody  not  already  covered,  from  the  office  boy  up  to  the 
President. 

However,  as  this  problem  is  being  considered  nowadays  by 
students  of  the  subject,  and  economists,  a  fourth  partner  is  added. 
that  is,  the  "Public", 

The  Committee  on  Industrial  Relations  of  the  Conmunity  Council 
or  New  York  City,  for  example,  had  a  meeting  last  week,  and  a 
representative  of  the  public  on  that  Committee  was  some  wellknown 
laay  in  New  York  City,  who  according  to  the  published  accounts, 
offered  three  out  of  the  five  resolutions  that  were  passed 
relative  to  profit-sharing  and  giving  the  public  and  labor  a 
voice  in  the  management  of  business. 


1-H 


suffPe^  tJ  thf  pt^J^?/*^*!?  ^^^^   "  *^s  unanimously  decided  to 
»)!ff  !;*!LJ   President  that  the  Community  Counolls  offered  the 

S^iL  fi^;*i7!»,^?^i'^®!?*f^"y  ^o^  evoking  oo-operation  in 
doing  away  with  industrial  unrest  in  the  country. 

«rnM«™'*/J!!J  Tv  °P®f^  °l   "*^®  public",  in  Connection  with  this 
?i  ?i!  i^fcJ^  the  point  brought  home  very  forcibly,  in  t^ing 
l?«o  L^^!^if!f  ♦?  *  }"Se  corporation,  last  week,  that  it  ^ 
iil?  exaStii^SiS^iJ^^J^  *^^  division  of  profits.  'l  don»t  know 
i^olo^  t^?^  how  big  his  company  is,  but  he  showed  me  his  pub- 
a;™«??s?^  t^v®"®?®®*  *°'  ^^*  y®^''  ^»^io^  Indicated  profits  of 

?onv  ?„*^«i^J^  ^^''^  °'  ?®"  million  dollars and  the  Government 

«?«L?!|\?f  *^at  over  six  million  dollars  for  war  taxes.  So 
?t«  fiL!  fr.^i??-''^'''  as  represented  by  the  Government,  is  getting 
iit  li^lLc     i?®  profits  of  business,  and  really  does  not  need 

^L,^2o  J5®v**^°?  ^^  *^®  proposition  as  we  have  started  out  to 
discuss  it  here  today. 

H>,ar.<^^'^>i?  ^^^^^^  to  the  Community  Council's  plea  for  profit- 
?he  pJ^L^*r!".°^?^*^^  '^'^   ^^^''  i*^  *hi«  particular  ciise  after 
tMn?^Tf^!?*  took  out  over  six  million  dollars,  it  left  some- 
Si  L^«JLr®*"'4^^°"  dollars and  judging  by  the  size  of 

inLftif  *  7   ?^*  *^®  oonpany  must  certainly  have  a  pretty  big 
1?J«  S«5?  ^c  ^^^""^   ^r**  inventory  to  be  able  to  produce  a  profit 
v«,,%?r'  I  S^POse  It  was  thirty  or  forty  million  dollars,  if 
i^«n  if^  V,*  fair  return  to  capital  on  an  investment  of  thit  sort, 
^?VSS«f5  ^^*  ?^*2®.^*.^*  "°*  "^r®  *^^^  Six  percent,  there  is 
!SJvo,o  ^^f*.^®!*  !°  divide,  among  probably  5000  or  6000 
Sit  f?;„^t?«J  iLi^^*   °?®  5^  °^y  different  angles  coming  into 
JS«v  ^Ji^,^*  ^'^  **f*  People  do  not  take  into  consideration  when 
i?«inM«r«5  Pf  of  "-sharing,  which  is  done  so  often  from  the 
Viewpoint  of  dividing  up  sometbflii  .else's  profits. 

tion  "^Ic^^fi!*  President  of  the  Illinois  Manufacturers'  Associa- 
m«S2'ii*  4°^»^^°,*,!'^^^®^  ^^^   discussions  very  aptly  as  "College- 
?K  iSJ^  ;  ,^<i«f  *^at  title  i^e  has  published  a  pamphlet  on 
Jhf  J^f^i^^^  situation,  in  which  he  brings  out  quite  forcibly 
rJ?«>f!?  f®""  consideration  of  "Management"  in  business,  and  its 
relative  inportance  in  the  scale  of  indxistry. 

aliv  Slinfr  "S^^  Cost  of  Uving"  hardly  needs  to  be  specif  ic- 
hor!^ ^®^^?®^'  ^eryone  is  acutely  familiar  with  it  and  has  first 
hand  knowledge  of  what  it  implies. 

Piar,  ^l   c^**  ^S  ***?  proposition  as  it  had  been  outlined  by  your 
done  ?«r  »^®  Committees:  "What  can  be  done,  or  what  is  bJiJg 
8itmti?n?"   ^^'°®''  '  *''*^^'  *°  "'*®*  *^^®  ^^Sh  cost  of  living 

SCOPE  OF  TNVESTIGATTn?J 

a  el  Jul  a ^^?L!^®  *4^S  ^"^^^   ®°'"®  concrete  basis,  I  sent  out 
r««if««i*LJ®**®'  ^'^   questionnaire  to  about  thr4e  hundred 
representative  concerns  in  all  branches  of  industry  throughout 

3>H 


A.^ 


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the  United  States,  so  as  to  get  as  general  an  expression  of 
opinion  on  the  subject  as  possible.  To  help  you  get  a  better 
understanding  of  the  answers  that  I  have  gotten  on  this  thing, 
I  want  to  read  you  this  letter.  (Reads) 

*The  outstanding  feature  of  business  today  is  the  industrial 
relations  situation — in  many  industries  it  is  coming  to  the 
point  where  the  manufacturer  is  seriously  considering  shutting 
up  shop  or  turning  the  plant  over  to  the  workers. 

«But  in  the  heat  of  the  striiggle  to  meet  the  ever  increasing 
demands  of  "Labor*,  what  is  being  done  for  "Management",  under 

which  term  is  included  that  vast  body  of  workers clerks, 

stenographers,  bookkeepers,  salesmen,  and  on  up  to,  in  many  cases, 
the  higher  executives  of  an  organization- — who,  unorganized,  and 
in  sharp  contrast  to  the  wage  workers,  have  been  "left  at  the 
post",  so  to  speak:  who  are  suffering  severely— -and,  as  a  rule, 
uncomplainingly in  the  effort  to  make  ends  meet;  who  are  wit- 
nessing the  humiliating  spectacle  of  seeing  even  the  most  ordin- 
ary forms  of  manual  labor  being  paid  far  in  excess  of  what  trained 

brain  workers  can  command are  they  to  be  left  to  work  out  their 

own  salvation? 

"Do  business  men  want  to  drive  the  right  arm  of  "Management" 
into  the  folds  of  organized  labor?  Already  there  are  signs 

pointing  in  that  direction witness  the  report  of  a  recent 

strike  of  newspaper  men  in  Boston,  and  the  meeting  which  it  is 
said  has  been  held  in  New  York  to  consider  organizing  some  of  the 
classes  of  office  help. 

"Some  of  the  manufacturers  in  the  twO  national  trade  organ*-* 
izations  which  I  represent  are  keenly  interested  in  the  solu- 
tion of  this  problem,  and  I  earnestly  request  your  help  to  the 
extent  of  replying  to  some  or  all  of  the  questions  on  the  ac- 
companying sheet* 

w If  you  are  interested — and  every  manufacturer  is  vitally 
interested  in  the  answer — -I  will  be  glad  to  send  you  a  siommary 
of  the  information  that  may  be  developed. " 

(QUESTIONNAIRE) 

»'l.  TShat  forms  of  bonuses,  profit-sharing,  stock  ownership,  or 
other  special  monetary  considerations,  do  you  practice,  and  how 
much  is  thereby  added  to  the  income  of  the  salaried  employes. 
Stated  in  percentages  of  1914  incomes? 

"3.  Do  you  help  these  employes  in  any  other  ways,  such  as  making 
loans  to  them  so  that  they  can  make  an  initial  payment  on  a  home, 
and  thereby  reduce  their  rental  expense;  or  for  the  discharge  of 
doctors*  bills,  funeral  expenses,  or  similar  burdens  which  tend 
to  lower  their  efficiency  through  worriment;  giving  them  the  bene- 
fits of  wholesale  buying,  etc.? 


3-H 


"3.   Considering  only  regular  salaries  or  ooznpensation,  what 
average  percentage  of  increase  over  1914  figures  are  you  paying 
to  Managers  of  Sales,  Finance,  and  the  higher  Executives? 

"4#   To  their  Assistajits,  coming  within  the  Executive  Class? 


If 


5.   To  Salesmen? 


f 


"6.   To  general  office  workers,  clerks,  stenographers,  bookkeepers, 
etc#? 

"It  is  sincerely  hoped  that  you  will  not  consider  these 
questions  as  being  an  attempt  to  pry  into  your  business  family 
affairs,  but  will  give  them  due  consideration  in  a  patriotic  Co- 
operative attempt  to  help  a  large  number  of  your  fellow  busi- 
ness ment  • 

One  of  the  answers  criticized  the  first  paragraph  of  my 
letter  as  being  too  pessimistic.  Yet  only  last  week  the  New  York 
papers  published  an  account  of  a  large  jewelry  manufacturing  con- 
cern (Groldsmith,  Stern  &  Company)  having  offered  to  turn  their 
plant  over  to  the  workers*   The  workers  had  struck  for  higher 
wages,  which  Mr#  Goldsmith  absolutely  could  not  grant  because 
his  sales  had  been  made  six  months  ahead,  on  the  basis  of  pro- 
duction costs  that  had  been  agreed  upon  with  the  men  and  as  a 
compromise  he  offered  to  turn  the  plant  over  to  them,  but  they 
refused  to  accept  it  which  goes  to  show  that  my  statement  is 
not  very  much  overdrawn. 

With  reference  to  the  third  paragraph  of  my  letter,  the 
papers  quite  recently  have  published  reports  to  the  effect  that 
the  bank  clerks  in  New  York  have  organized  a  union  and  are 
formulating  demands  upon  their  employers,  with  the  alleged  threat 
of  a  strike  if  the  supposed  demands  are  not  granted. 

The  questions  you  will  note  were  of  a  rather  personal  nature, 
and  it  was  to  be  expected  that  a  good  many  concerns  wo\ild  not 
see  their  way  clear  to  answer  them  and  probably  others  did  not 
have  the  time.   But  the  response  really  has  been  remarkable. 

For  example,  I  have  a  letter  here  from  a  concern  that  is 
the  leader  in  its  branch  of  industry,  which  says:   '•Your  letter 
was  referred  to  at  a  recent  meeting  of  our  Board  of  Directors 
and  had  the  interested  attention  of  the  members  present. ^ 

There  were  quite  a  number  of  cordial  replies, /many  of  them 
gave,  as  fully  as  they  could,  just  the  information  that  I  asked 
for  in  this  questionnaire.   To  enable  you  and  the  concerns  to 
whom  a  copy  of  this  record  will  be  sent  to  give  due  weight  to 
the  data  I  have  collected,  I  will  give  the  names  of  those  who 
have  replied*   They  are  as  follows: 


4-H 


f 


H.  M.  Wallis,  President,  J.I.Case  Plow  Works  Co*,  Racine,  Wis^ 
J.  C.   Hobart,  President,  The  Triumph  Electric  Co.,  Cincinnati,  0» 
George  H.  Barbour,  President,  The  Michigan  Stove  Cot  of  Detroit 
C*  L.  Sebring,  President,  The  Sebring  Pottery  Co*,  Sebring,  0. 
£•  T.  Bedford,  President,  Corn  Products  Refining  Co*,  New  York 
Geo*  W.  Gair,  President,  Robert  Gair  Company,  Brooklyn,  N«  ¥• 
Arthur  T,  Davenport,  General  Manager,  Sweet-Orr  &  Co.  Inc.,  N»  Y, 
Frank  L,  Severance,  Treasurer,  Irving-Pitt  Mfg.  Co.,  Kansas  City 
Chester  E*  Rahr,  Vice  President,  The  Fiintkote  Co»,  Boston,  Mass.. 
Ernest  E,  Bell,  Vioe  President,  The  Hydraulic  Pressed  Steel  Co. 

Cleveland,  0% 
F«  H.  Dodge,  Director  of  Sales,  Burroughs  Adding  Machine  Co., 

Detroit,  Mich. 
Tt  F.  James,  General  Sales  Manager,  Brovm  Shoe  Co*,  St«  Louis, Mo. 
m    ^^^^   Asst.  Treasurer,  The  American  Thread  Co.,  New  York 
Wt  H.  Cameron,  Manager  Industrial  Relations,  Eastman  Kodak  Co*, 

Rochester,  N.  Y. 
Ht  E.  Squier,  Dept.  of  Education,  Ford  Motor  Co*,  Detroit,  Mich. 
Burt  Bros.  Philadelphia,  Pa. 
Wf  Wt  Anderson,  Office  Manager,  Thomas  Maddock^s  Sons  Co. 

Trenton,  N.  J. 
Chast  Molloy,  Manager  Industrial  Relations,  The  Solvay  Process 

Co.,  Syracuse,  N.  Y. 
W.  I.  Clark,  Service  Director,  Norton  Conqpany,  Worcester,  Mass. 

C.  L.  Rossiter,  Underwood  Typewriter  Co.,  New  York 

F.  M.  Stowell,  President,  The  Northwestern  Knitting  Co.iji 

„  _  _^  Minneapolis,  Minn. 

Ht  D.  umittlesey.  Vice  President,  The  Sherwin-Williams  Co., 

-,,   ^  ^  Cleveland,  0* 

Edward  Prizer,  President,  Vacuum  Oil  Co.,  New  York 

Paul  H.  Nystrom,  Sales  Manager,  International  Magazine  Co.,  N.Y. 

i#  N.  Haugbton,  Secretary,  The  Haughton  Elevator  &   Machine  Co., 

T  v  tn  ^  Toledo,  Ohio 

J.  E.  Frederick,  Secretary,  Kokomo  Steel  &   Wire  Co.,  Kokomo,  Ind. 

^.   R.  Shepard,  Vice  President,  General  Baking  Co.,  Boston,  Mass. 


publi?ti^^^^^^  ^^^^  ^^^^  ^^   *^^  discussion  to  the  following. 

n>rof it-sharing  in  the  United  States"  published  By  the  Department 
of  Labor  •  Bulletin  No.  308 

"Abrief  account  of  the  Education /^rk  of  the  Ford  Motor  Company" 
published  by  that  Company  under  date  of  Dec.  13,  1916. 

••Profit-Sharing  Plan"  Bulletins  published  by  the  Underwood 
Typewriter  Co* 

■The  Text  of  the  Larkin»Sompany's  Offer  to  Its  Enployees"  pub- 
lished in  Printers'  Ink  issue  of  Sept.  18,  1919. 


5-H 


r- 


I- 


H.  M.  Wallis,  President,  J. I .Case  Plow  Works  Co.,  Racine,  Wis, 
J.  0.   Hobart,  President,  The  Triumph  Electric  Co.,  Cincinnati,  Ot 
George  H*  Barbour,  President,  The  Michigan  Stove  Co.  of  Detroit 
C*  L.  Sebring,  President,  The  Sebring  Pottery  Co.,  Sebring,  0, 
E.  T,  Bedford,  President,  Corn  Products  Refining  Co%,  New  York 
Geo.  W,  Gair,  President,  Robert  Gair  Company,  Brooklyn,  N«  Y. 
Arthur  T,  Davenport,  General  Manager,  Sweet-Orr  &   Co.  Inc#,  N,  Y, 
Frank  Lt  Severance,  Treasurer,  Irving-Pitt  Mfg.  Co.,  Kansas  City 
Chester  E*  Rahr,  Vice  President,  The  Fiintkote  Co#,  Boston,  Mass.. 
Ernest  E.  Bell,  Vioe  President,  The  Hydraulic  Pressed  Steel  Co. 

Cleveland,  0. 
F«  H.  Dodge,  Director  of  Sales,  Burroughs  Adding  Machine  Co., 

Detroit,  Mich. 
T,  F.  James,  General  Sales  Manager,  Brown  Shoe  Co.,  St#  Louis, Mo. 
m  ^^^*  Asst.  Treasurer,  The  American  Thread  Co.,  New  York 
Wi  H.  Cameron,  Manager  Industrial  Relations,  Eastman  Kodak  Co., 

Rochester,  N.  Yt 
H*  E.  Squler,  Dept.  of  Education,  Ford  Motor  Co.,  Detroit,  Mich. 
Burt  Brost  Philadelphia,  Pa* 
W,  W.  Anderson,  Office  Manager,  Thomas  MaddockU  Sons  Co. 

Trenton,  N«  J. 
Chas.  Molloy,  Manager  Industrial  Relations,  The  Solvay  Process 

COf,  Syracuse,  N.  Y. 
W«  I,  Clark,  Service  Director,  Norton  Company,  Wtorcester,  Mass. 
C,  L*  Rossiter,  Underwood  Typewriter  Co.,  New  York 
F,  M.  Stowell,  President,  The  Northwestern  Knitting  Co. 91 
rj     r^     nf^^  Minneapolis,  Minn. 

H.   D,  Whittlesey,  Vice  President,  The  Sherwin-Williams  Co., 
_,,   ^  ^  ,  Cleveland,  0. 

Edward  Prizer,  President,  Vacuum  Oil  Co.,  New  York 
Paul  H.  Nystrom,  Sales  Manager,  International  Magazine  Co.,  N,Y. 
it  N.  Haugbton,  Secretary,  The  Haughton  Elevator  &   Machine  Co., 
T  IT  TT  Toledo,  Ohio 

J.  E.  Frederick,  Secretary,  Kokomo  Steel  &   Wire  Co.,  Kokomo,  Ind. 
^.   H.   ^hepard,  Vice  President,  General  Baking  Co.,  Boston,  Mass. 


v^4^®ff^®^^®®  ^®^®  ^^^®  ^^  *^^  discussion  to  the  following 
publications:  ^' 

•nProf it-sharing  in  the  United  States"  published  By  the  Department 
of  Labor  •  Bulletin  No.  208 

"Abrief  account  of  the  Education/t?rk  of  the  Ford  Motor  Company" 
published  by  that  Company  under  date  of  Dec.  12,  1916, 

"Profit-Sharing  Plan"  Bulletins  published  by  the  Underwood 
Typewriter  Co. 

"The  Text  of  the  Larkin^gompany^s  Offer  to  Its  iinployees"  pub^ 
lished  in  Printers'  Ink  issue  of  Sept»  18,  1919. 


5-H 


Profit  Sharing  Plans  described  by  George  W*  Perkins  at  a  meeting 
of  the  National  Civic  Federation  of  New  York  on  Sept.  11,  1919. 

"College  Made  Utopias  and  Labor  Ifardst"  published  by  Dorr  E.  Felt, 
President,  Felt  &   Tiprrant  Mfg.  Co.,  Chicago,  June  34,  1919. 

Proctor  &   Gamble  Company's  Plan  described  in  Printers*  Ink  issue 
of  March  37,  1919  and  the  October,  1919,  number  of  the  American 
Magazine. 

The  So|/ay  Process  Oo.^s  Pamphlet  on  Profit  Sharing,  Pensions, 
Mutual  Aid  and  ^Ifare  Works,  published  Jan.  1,  1915* 

♦Salaried  Men  and  High  Living  Costs"  by  E^  T.  Bedford,  President, 
Corn  Products  Refining  Co.,  published  in  New  York  Times 
Aug.  17,  1919. 


NOTE: 


The  following  additional  references  may  prove  helpful 
to  anyone  desiring  to  go  further  into  the  subject  of 
profit  sharing,  bonuses,  etc.: 


••The  Other  Side  of  Profit  Sharing" 
Miller,  Franklin,  Basset  &  Co. 
August  1919. 


by  %!•  R.  Basset,  President, 
published  in  "System"  for 


Articles  by  James  A.  Farrell,  President,  U.  S^  Steel  Corporation, 
and  Boyd  Fisher,  published  in  "System"  March  and  April,  1916* 


The  Hilo  Varnish  Corporation  Plan  -  Printers*  Ink 
Dayton  Engineering  Laboratory  Co.Plan     »    " 

Sears,  Roebuck  &   Co.  Chicago 

Consolidated  Gas  Co.,  N.  Y. 

Endicott,  Johnson  &  Co. ,Endicott,N.Y. 

Morris  &  Co.,  Chicago 

S,  W.  Strauss  &  Co.,   N.Y, 

American  Woolen  Co.  Home  Building  Plan 


3/B7/19 
6/19/19 


Plans  reviewed  at 
vario\is  times  in  the 
New  York  limes  and 
other  papers. 


It  would  hardly  add  to  the  interest  of  the  discussion 
if  I  read  the  letters  that  I  have  received,  with  the  exception  of 
one  or  two  oases  where  the  writeifehave  been  apparently  students 
of  the  subject.   As  a  matter  of  record,  and  for  convenient  future 
reference,  I  will  incorporate  in  the  report  those  letters  that 
have  contributed  to  the  fund  of  inf^jmation  that  I  have  collected, 

No  doubt  most  of  you  have  seen  the  advertisements  that 
the  Hydraulic  Pressed  Steel  Company  ran  in  "The  Saturday  Evening 
Post",  in  which  they  advocated  a  sq\iare  deal  and  the  need  for 
co-operation  between  Capital,  Labor  and  Management.   I  have  re- 
prints of  them  here,  if  anyone  should  want  to  look  at  them* 


6-H 


w.^,. 


r 


Mr*  Bell,  Vice  President  of  that  conoern,  TRfhom  I  happen 
to  know,  wrote  me  that  it  would  be  pretty  hard  for  him  to  go 
into  details  such  as  I  have  asked,  but  as  he  and  his  co-workers 
have  gone  at  the  root  of  the  entire  industrial  relations  problem, 
and  as  it  is  patent  that  they  are  on  the  right  track  in  their 
efforts  to  solve  it,  any  expressions  from  them  deserve  our  most 
careful  attention.   I  am  therefore  going  to  take  the  liberty  or 
reading  Mr.  Bellas  letter,  believing  that  he  will  not  object  to 
my  doing  so,  even  though  it  does  reveal  some  rather  intimate 
Hydraulic  family  matters.   (Reads) 

•To  go  into  details  of  the  questions  which  are  suggested  in 
your  communicat:.on  of  August  30th  would  make  a  volume.   To  recite 
the  experiences  of  the  Hydraulic,  develop  the  thinking  which  has 
been  done  on  the  part  of  Hydraulic  management  and  support  the 
conclusions  which  have  been  reached,  would  mean  another  volume. 

•Personally,  I  should  likdt  very  much  to  help  you  in  con- 
nection with  the  questionnaire.   The  Hydraulic  Company  would  like 
to  help  you,  but  your  questions  cover  a  very  broad  scope  of  opera- 
tion, and  one  of  the  difficulties  in  connection  with  attempts 
and  failures  to  meet  this  situation  is  due  to  the  fact  that  so 
many  firms  try  to  do  the  material  thing  without  taking  into  con- 
sideration the  psychology  of  the  problem  and  the  necessary  educa- 
tion of  both  factors  -  those  who  invest  their  money  and  those 
who  invest  their  labor  -  to  a  full  appreciation  of  the  rights, 
the  worth  of  each  other,  their  dependence  uqpon  eaeh  other  and  the 
element  of  human  eqxiity  and  justice,  which  must  prompt  everything 
which  is  done  in  this  connection  in  order  to  make  it  a  success. 

•In  an  attempt  to  cover  your  questions  briefly,  workers  in 
the  Hydraulic  are  divided  into  three  classes  -  those  who  invest 
their  capital,  those  who  invest  their  brains  and  those  who  in- 
vest their  brawn.   Those  who  invest  their  brains,  and  these  in- 
clude all  who  through  right  thinking  and  the  application  of  bet- 
ter thinking  to  their  work  can  increase  profits,  that  is,  dovm 
to  the  unit  bosses  in  the  shop,  are  sharers  in  the  profits.  Ihey 
all  have  opportunity  to  purchase  Hydraulic  stock,  and  their  share 
in  the  profits  may  be  used  in  payment  for  this  .stock  or  not,  just 
as  the  individual  may  elect,  but  it  is  simply  impossible, Friend 
Rohkbfech,  for  me  to  go  into  this  whole  problem  by  letter*   There 
is  bonus,  profit  sharing,  there  is  opportunity  for  stock  owner- 
ship, which  adds  from  50  to  100^  to  the  salary  income  of  the 
managerial  and  operating  class  .  r^   ^..^  *    . 

•Regarding  Question  No. 3,  there  is  a  Mutual  Benefit  Associa- 
tion which  takes  care  of  sick  benefits,  death  benefits,  doctor 
bills,  funeral  expenses,  and  has  a  Building  and  Loan  adjunct  from 
which  employes  can  borrow  in  the  purchase  of  homes. 

•It  would  mean  reference  to  our  Accounting  Department  and 
considerable  figuring  to  determine  an  accurate  answer  to  your 
third  question. 

•Sales  managers,  salesmen,  office  workers,  clerks,  stenog- 
raphers, bookkeepers,  etc.,  are  all  included  in  the  distribution 
of  profit  bonuses. 

•Trusting  that  this  may  help  you,  but  with  full  knowledge 
that  it  cannot  help  you  very  much  without  getting  the  true  spirit 
of  the  proposition  in  the  minds  of  every  institution  who  takes 
work  of  this  character,  I  would  refer  you  for  further  information 

7-H 


to  the  reprints  of  copy  which  has  recently  appeared  in  some  of 
the  popular  weeklies  over  the  signature  of  The  Hydraulic  Pressed 
ftteel  Company,  and  to  an  interview  with  our  President,  Mrt  James 
E.  Foster,  which  appeared  in  the  issue  of  Printers'  Ink  under 
date  of  July  31st • 

Yours  very  truly, 

(Signed)  Ernest  E*  Bell, 

Vice  President- • 

There  was  also  a  very  comprehensive  letter  from  a  large 
eastern  manufact\irer  who  criticised  the  pessimistic  tone  of  my 
communication^  He  also  has  evidently  made  a  study  of  the  problem 
of  h\iman  relations  in  business,  and  has  contributed  thoughts  of 
such  value  that  I  will  read  his  communication  to  you.  (Reads) 

"I  will  attempt  a  general  reply  to  yours  of  the  30th  ult#, 
but  the  brevity  with  which  I  am  compelled  to  write  will  result 
in  rather  a  superficial  summary^ 

"I  do  not  believe  that  there  is  a  single  instance  where 
industrial  relationships  between  the  executive  and  production 
forces  have  awakened  serious  thought  on  the  point  of  turning  a 
plant  over  to  the  iiorkers  for  operation*   There  are  such  happen- 
ings in  far-eastern  Europe  and  leanings  to  the  idea  have  appeared 
in  southern  Europe^  but  in  this  country  there  are  not  four  in- 
stances where  the  experiment  has  been  tried,  and  in  these  cases 
the  workers  held  office  and  position  on  the  basis  of  the  satis- 
factory showing  they  made  to  the  investors.   I  consider  your 
first  paragraph  needlessly  pessimistic  on  the  social  situation. 
"No«l  You  refer  to  the  demands  of  the  factory  worker  and  the 
wage  paid  the  producer  as  compared  to  the  salaries  of.  the  men 
and  women  holding  managerial  and  clerical  positions.  Herein,  it 
strikes  me,  you  have  undesignedly  condensed  the  whole  problem  of 
labor,  and  in  reply  I  submit  that  were  it  possible  for  the  exeeu- 
tives  of  the  business  to  draw  as  close  to  the  factory  operatives 
as  they  do  to  the  forces  of  their  general  offices  they  would  soon 
establish  a  kindlier  relationship  throughout  and  a  better  under- 
standing on  the  part  of  the  factory  workers  as  to  what,  in  jus- 
tice to  business,  they  can  expect  it  to  standi   From  what  is  here 
stated,  you  can  infer  whether  I  think  Management  is  paid  too 
little  or  Production  too  much.  Every  employer  has  got  to  answer 
according  to  the  showing  of  his  own  pay-roll  and  be  helped  to  a 
clear  vision  of  it  by  the  sort  of  atmosphere  prevailing  in  his 
organization.   In  our  factory,  we  give  bonuses  on  occasion,  and 
have  found  stock  ownership  the  least  desirable  method  of  reward 
except  in  the  executive  branches.   The  pay-roll  is  systematically 
studied  and,  coincidentally,  production  is  likewisst 
"No. 3  We  have  a  benefit  association,  through  the  medixim  of  which 
employees  may  make  loans  for  such  emergencies  as  arise  in  life 
and  sufficient  at  times  to  take  equity  in  a  dwellings   We  main- 
tain a  restaurant  at  a  loss  of  approximately  five  thousand  dol- 
lars per  year,  employ  a  trained  nurse  in  a  well-equipped  dis- 
pensary, and  a  physician  and  an  oculist  are  in  attendance  at 

8-H 


stated  hours-  Every  employe,  after  one  year's  service,  is  cover- 
ed under  our  Group  Life  Insurance  Policy  in  aji  amount  equiva.Tent 
to  one  yearns  wages • 

"NO*  3  The  increase  in  the  salaries  of  the  Managers  of  Sales 
and  Managers  of  Production  over  1914  averages  70%. 

"No.  4  Their  assistants  and  those  holding  higher  positions  in 
the  correspondence  and  purchasing  departments,  75^« 
"No*  5  To  salesmen  the  advance  over  1914  was  75?b. 
"No.  6  To  the  clerical  staff  of  the  general  office,  varying  ad- 
vances, being  from  50fo  to  100^,  according  to  ability,  term  of 
service  and  position.   Those  who  left  our  organization  for  em- 
ployment elsewhere  did  so  through  ambitious  notions  and  with  the 
idea  of  striking  out  independent ly#   They  regarded  their  training 
as  the  best  asset. 

■I  cannot  answer  all  your  questions  as  fully  as  I  would  like. 
Indeed,  I  do  not  think  figures  do  much  to  elucidate  a  question  of 
this  sort*   So  long  as  production  is  commensurate  with  salary, 
the  wage  is  a  secondary  consideration,  and  our  people  are  being 
educated  to  realize  this.   The  psychological  intolerance  of  em- 
ployees who  are  slow  producers  by  their  fellows  who  realize  that 
production  means  money  to  them  adjusts  working  conditions  automat- 
ically. • 

NOTE:  The  remaining  letters  which  were  commented  upon  by  the 
Secretary  are  quoted  below,  in  full,  with  the  exception 
of  one  or  two  who  had  asked  that  their  remarks  be  not 
published* 

In  view  of  the  confidential  nature  of  much  of  the  informa- 
tion disclosed,  it  is  deemed  necessary  to  withhold  the  names  of 
the  writers,  and  the  order  in  which  they  are  given  in  no  way 
agrees  with  the  listing  of  the  names  on  a  previous  page. 


"A"  "Every  employee  that  we  have  in  these  plants  draws  a  bonus 
of  ten  percent  every  five  weeks. 

"We  have  no  welfare  schemes  except  the  Mutual  Benefit  Associa- 
tion which  is  open  to  every  employe.   It  takes  care  of  various 
funeral  expenses  also  some  doctor^s  services  etc.,  as  well  as 
sick  benefits.   In  your  third  question  I  should  say  *  out  40>, 
the  same  to  number  four  and  to  number  five  that  varies  and  they 
are  on  a  commission  basis  and  their  earnings  run  about  double. 
Number  six  is  apparently  the  same  as  number  three." 

"B"  "In  your  letter  of  August  30th  you  ask  for  answers  to  ques- 
tions on  several  subjects  mentioned. 

"To  the  first  would  say  that  we  have  no  arrangements  that  come 
directly  under  this  head,  but  in  answer  to  clause  3  we  do  have, 
"^e  are  always  glad  to  do  what  we  can  to  assist  any  of  our 
employees  to  enable  them  to  secure  homes*  We  do  not  go  into  the 
payment  of  doctors*  bills  direct  but  every  person  in  oyr  employ 
if  married  is  insured  in  the  Equitable  Life  Assurance  Society  for 
$500.00  in  case  of  death.   Single  persons  are  insured  for  1300.00, 

9-H 


we  paying  the  entire  premiume.  We  have  ajiother  organization  that 
takes  care  of  thera  in  a  different  way  in  case  they  are  sick  or 
injured. 

"In  answer  to  the  third  clause.   The  list  of  salaries,  wages 
^A   flfn^^^^S  ^^  ^^^   largely  increased  during  the  years  1918 
and  1919.   It  includes  not  only  the  manufacturing  end  but  the  of- 
iice  as  well,  not  taking  in  the  executives,  but  covers  5  and  6 
clause. 

"Our  business  is  not  like  the  automobile  business.   It  does 
not  present  the  margin  of  profits  it  gives-  We  try  to  consider 
ail  of  our  employees  as  members  of  the  family  and  treat  them  as 
nicely  as  we  can  and  give  them  all  the  benefits  we  can, " 

■C" 

"Answering  yours  of  the  30th,  we  are  pleased  to  submit  to 
you,  the  Information  requested:- 


"#1.   With 
sharing  plan  is 


the  exception  of  factory  labor,  a  bonus  or  profit 

^ in  force  with  our  employees,  the  maximtim  distri- 

?+v°*v^?^'^*^"S  to  10%  of  the  employee's  salary  in  accordance 
witn  the  length  of  time  they  have  been  in  our  employ.  This  and 
a  comnission  basis  for  the  salesmen,  and  other  plans  in  force 
^»lf:.®*^^^y  ^  called  a  profit  sharing  plan.   The  Company  is 
ambitious  to  extend  this  sort  of  plan.   The  Company  makes  it 
r«f^      S^  f*®  employees,  to  some  extent,  to  own  stock  in  the 
company.   Basic  salaries,  drawing  accounts,  etc.  are  probably 
raised  from  35%  to  50%  over  1914. 

^,- ,"#3,   There  is  no  legitimate  way  we  know  of  in  which  we 
would  not  help  any  employee  of  thla  Company  who  has  been  with 
us  long  enough  for  us  to  become  acquainted  with  their  attitude 
ana  loyalty. 

*#3.   Twenty-five  to  fifty  percent, 
"#4.   Twenty-five  to  fifty  percent. 

TQ,-  **^*   ^^1  salesmen  work  on  a  straight  commission.   Since 
x»i*  many  of  our  salesmen  who  were  then  working  for  two  thousand 
dollars  per  year,  are  probably  making  from  ten  to  twenty  thousand 

Q^-;i  I  ^^'  ^®f^'  ^^°^   "^i*'*'  **^ey  must  deduct  their  expenses, 
^me  of  our  salesmen  this  year  have  made  even  more,  so  the  in- 
♦«  ««f  4.?^^  to  salesmen  is  estimated  to  average  from  one  hundred 
is  ^  hlSn^,'^^^^^''®"*'   "^^  interesting  fact  along  these  lines 
an^^ont  7^^^   ^^®  ®^®  manber  of  dalesmen  that  we  had  in  1914 
J?rni!i„  f^^  o^f.t'usiness  is  from  ten  to  twelve  times  as  large, 
hive  S^  inS$r^?f  *J^*  *  flexible  basis  by  which  the  salesmen 
S  Ln   opportunity  to  earn  without  limit,  is  a  great  developer 
of  men.   This  must  apply  to  all  organizations. 

•#6.  Estimated  from  twsnty-fige  to  fifty  percent. 

ohx,,*  "COMMENTS.  We  are  thorough  believers  in  a  bonus,  profit 
sharing  or  any  other  arrangement  which  will  allow  the  employees 

10-H 


I    I 


I 


to  }^«o^per«  We  have  by  no  means  reached  what  we  Xi»<»w  to  be  the 
proper  sltxiatlon  9lb  tu.r   a.«  ^nua,  profit  eharlnga  stock  ownership, 
etc*  are  oonoerned.  It  is  our  belief  that  n^  concern  can  prosper 
vrtiose  employees  do  not  prosper  witn  iz,     In  fact>  actiaal  prosper- 
ity could  not  exist  without  all  connected  being  justly  prosperous. 

••Your  questionnaire  regarding  the  salaried  man  and  the  high 
cost  of  living  has  been  referred  to  this  Department!  We  are  very 
glad  to  give  you  what  infor»ation  we  have*  To  some  of  your  ques- 
tions I  regret  that  more  definite  information  cannot  be  given^  but 
you  will  appreciate  the  limitations  imposed  by  a  large  organiza- 
tion such  as  our*8. 

"The  following  answers  are  numbered  to  Correspond  with 
your  questions: 

•*!•  The  Company  pays  to  all  employees  a  yearly  Wage  Dividend 
amounting  to  2j%  on  the  average.  A  special  wage  bonus  was  paid 
during  the  war  and  now  has  become  incorporated  with  the  regular 
wage*  This  varies  between  10  and  15^.  A  stock  ownership  plan  is 
now  being  put  into  effect •   Just  what  percentage  this  will  add 
to  the  employe's  wagk  or  salary  cannot  be  estimated. 

"Due  to  the  special  bonus  and  Wage  Dividend  the  salaried 
man's  wage  is  at  present  between  13  and  15^  higher  than  it  was 
in  1914,   This  figure  is  independent  of  regular  wage  increases* 

"S*  No  regular  program  has  been  in  effect  for  helping  the 
salaried  employes  in  matters  of  housing,  wholesale  buying  etc* 
Special  cases  were,  however,  taken  care  of  by  the  Company,  A 
aystemlzation  of  this  welfare  work  is  now  under  way* . 

"St  To  the  specific  question  regarding  the  percentage  of 
increase  for  various  positions  and  types  of  work  I  can  only  give 
you  a  general  answer.   These  positions  have  received  increases  de- 
pending entirely  upon  the  productivity  and  increasing  values  of 
the  person.  Hence,  there  is  such  a  variation  in  the  various  in- 
creases that  I  could  not  give  you  even  a  representative  percent- 
age, nor  would  an  average  have  any  meaning  whatsoever." 

"Wfe  have  your  letter  of  the  6th  inst,  and  our  experience 
confirms  your  statement  that  there  is  a  widespread  interest  at 
the  present  time  in  industrial  relations  work*  We  are  pleased 
to  answer  the  specific  questions  asked  in  your  circular  letter 
ox  August  30th  as  follows:- 

"(l)  We  are  sending  you  under  separate  cover  a  copy  of 
our  pamphlet  "A  Brief  Account  of  the  Educational  Work  of  the 
Ford  Btotor  Company",  You  will  note  in  this  that  our  plan  places 
a  share  of  the  profits  in  the  bi-weekly  pay  envelope  of  every 
employe  after  a  probationary  period  of  one  month.   The  eligibility 
of  an  employe  to  receive  a  share  in  the  profits  is  determined 
not  through  the  grade  of  work  that  he  does  but  through  his  per- 
sonal habits  and  life.   In  other  words,  the  oorapany  reserves  the 

11-H 


right  to  withhold  profit  sharing  from  any  Indlvidiial  who  is  using 
it  in  a  detrimental  manner  in  order  that  we  may  bring  to  his 
attention  the  mistake  that  he  is  makings  The  minim\jun  rate  of 
v5t00  per  day  established  when  the  plan  was  inaugurated  Janv.£.7v 
13,  1914  was  increased  to  $6t00  per  day  the  first  of  January  ci 
this  year. 

"C3i   No. 

*(3)  There  is  no  established  basis  of  compensation  for 
executives  and  we  are  accordingly  not  in  position  to  give  you  a 
comparison  in  this  class  that  would  be  of  value  to  you. 

■(4 J  Same  as  No.  3 

"(5)  We  have  no  salesmen. 

•(6)  The  rate  for  general  office  workers  has  been  increased 
approximately  thirty  per-centt" 

"1.  Bonus  plan  now  under  consideration  -  wages  advanced 

on  work  over  1914  100^^ 

•2t  Yes. 

•3.  50  to  75?t 
"4,  75% 
"5.  75^ 
"6.        75%  " 

"Your  letter  of  the  30th  ult.  was  referred  to  at  a  recent 
meeting  of  our  Board  of  Directors  and  had  the  interested  atten- 
tion of  the  members  present. 

"While  we  are  disposed  to  answer  your  inquiries  as  made  and 
lend  assistance  to  your  undertaking  in  every  possible  way,  it  , 
will  be  difficult  for  us  to  be  specific  in  the  matter  of  percent- 
ages* 

"We  have  not  failed  to  recognize  the  inportance  of  satisfy- 
ing our  Managing  ajid  Clerical  Staffs  during  these  critical  times 
and  our  payrolls  have  Increased  very  considerably. 

"Taking  your  inquiries  in  the  order  made: 

"1.   Bonuses  have  been  paid  the  higher  salaried  members  of 
staff,  approximating  20^  per  annum. 

"2.  On  application,  if  an  employe  is  in  need  of  financial 
assistance  and  circumstances  warrant  our  assisting  him, 
he  is  so  favored. 

"With  an  eye  to  the  general  welfare,  a  store  has  been  es- 
tablished, financed  by  thia  Company  and  run  by  a  club  organized 
by  employees.   The  store  furnishes  maiiy  necessities  to  em- 
ployees at  cost. 

"3.  Approximately  45-l/2^. 

"4,  Same  as  No.  3. 


13-H 


^5.     Approximately  40^, 

"6.   Approximately  45^  to  50^* 

"As  already  intimated  we  are  interested  in  the  subject  you 
are  dealing  with  and  trust  the  foregoing  may  serve  you#   We  shall 
be  glad  to  have  you  send  us,  when  summarized,  a  report  on  the 
results  of  your  xmdertaking,  that  we  may  learn  how  the  problem  is 
being  met  by  others*" 

"H" 

"Your  letter  of  inquiry  dated  September  6th,  1919,  deals 
with  a  subject  which  is  of  the  greatest  importance,  and  it  is  a 
pleasure  to  us  to  communicate  whatever  we  can  that  will  enable 
the  Society  to  compile  a  comprehensive  summary. 

"For  several  years  our  Company  has  set  aside  funds  for  the 
assistance  of  employees  along  the  lines  mentioned  in  your* 
questionnaire  of  August  30tht  These  funds  we  have  foiond  to  be 
best  administered  through  a  committee  composed  of  the  employees 
themselves.   This  Committee  is  known  as  our  Welfare  Board  and  has 
full  power  to  make  loans  as  well  as  give  other  assistance  to 
employees. 

"Concerning  your  remaining  questions,  we  havenU  compiled 
any  detailed  information  as  to  the  increased  compensation  for 
the  specific  positions  which  yo^  mentiont  In  general,  we  know 
that  the  average  increases  we  have  made  vary  between  30  and  50 
per  cent.  This  information  is  probably  not  as  specific  as  you 
want  but  I  give  it  to  you  for  what  it  is  worth* 

"We  here  will  certainly  be  interested  in  the  summary  of 
information  which  you  prepare  and  shall  look  forward  to  receiv- 
ing a  copy, " 

"I" 

"Reply  to  your  letter  of  the  30th  has  been  delayed  owing  to 
my  absence  and  pressxire  of  other  matters, 

"Answering  the  questions  you  ask  - 

"1.  For  some  years  we  have  had  a  participating  salary  arrange- 
ment with  our  heads  of  departments  and  a  few  others,  the  amount 
so  distributed  depending  upon  the  net  profits  of  the  business  and 
aaoounting  on  the  average  to  better  than  10^  of  the  1914  Incomes . 
The  above  Is  applied  to  factory  heads  of  departments  as  well  as 
office* 

"3.   While  having  no  general  plan,  the  management  has  always 
taken  an  interest  in  the  welfare  of  its  emplpyees  and  endeavor 
to  be  helpful  to  them  in  the  solving  of  any  of  the  general  bur- 
«f!??ff  ri^^.f"^  ^"y  manner  which,  as  it  is  brought  to  the  manage- 
ment's attention,  it  could  be  done.   Many  times  it  has  been  alone 
the  lines  mentioned  of  payment  of  doctors'  bills,  funeral  expenses 


13-H 


and  at  other  times  the  assistance  in  securing  of  home,  wholesale 
buying,  etc.^  this  latter  particularly  since  the  watt 


»3* 

"4. 

•6. 


About   33-/l/3^» 

About   50 /i<  - 

About   33-i/3^. 

About   30^^  with  further  increases  in  contemplation.  " 


fijii 

■In  reply  to  your  letter  of  August  30,  in  which  you  outline 
some  questions  which  you  would  like  for  us  to  answer,  I  shall 
attempt  to  do  so  briefly, 

"l.   We  have  a  profit  sharing  plan  which  goes  to  the  heads 
of  department?,  which  ii^creases  their  earnings  from  twenty  to 
eighty  percent,  according  to  the  responsibility  of  the  position 
they  hold;  the  executives,  cf  course,  getting  a  larger  percentage. 
This  Profit  Sharing  is  payable  in  Common  S^cck  in  the  Company, 

*3.   We  asGl.st  any  employe  in  our  coi/ioany  in  buying  Common 
Stock  in  the  cor.'^any,  which  makes  them  interested  and  also  gives 
them  a  savings  account  which  they  can  build  up  and  receive  an  in- 
come from.   We  allow  them  to  ma.co  a  nominal  initial  payment  and 
90  much  every  three  to  six  liionihc, 

"3t   I  would  consider  thao  we  are  paying  our  Managers  of 
Sales,  Finance  J  Production,  and  the  hjghei-  executives  an  increase 
in  salary  of  about  50  per  cent  over  1914  figures. 

••4,   Off-hand,  I  would  say  they  are  receiving  forty  to  fifty 
percent  more  than  they  received  during  1914*   This  refers  to 
assistants  coming  within  the  Executive  Ciacs* 

■5.   Our  salesmen  are  fiu;uied  on  a  ^orcmicaion  basis;  thereby, 
their  earnings  are  refiulatec^  by  the  volume  of  their  sales.   They 
show  by  far  the  largest  increase  in  anouiAt  of  earnings  of  any  of 
the  employes  connected  vvith  the  company 

"6.   I  would  estimate  that  we  are  paying  our  General  Office 
help  an  average  of  33-1/3  to  50  percent  more  than  in  1914. 

•I  should  like  to  have  a  summary  of  the  information  you 
have  gotten  along  this  line.   If  •'.here  is  anything  further  you 
should  like  to  know,  I  shall  be  only  too  glad  to  furnish  it^« 

■I  will  answer  your  questions  in  the  order  in  which  they 
are  numbered  in  your  letter. 

•!.   Our  bonus  system  to  sa?.ari3d  emplo^^ees  is  as  follows: 
The  corporation  first  takes  from  the  profits  5fo  interest  on  their 
total  investment  and  of  the  remairder  10^  is  given  to  our  salaried 
employees.   Last  year  this  amount  represente'd  about  lOf^  of  the 
employees^  yearly  salary. 


14-H 


V 


^invppfVn^L^^^^.K^''^^^*^®''^  Willing  to  make  loans  to  our  em- 
ployees to  help  them  out  in  any  emergency. 

"3«  Average  increase  75^  to  100^» 

■4,  Average  increase  75?&  to  100^. 

••5,  Average  increase  75%   to  100^, 

•6,  Average  increase  75?&  to  100^. 

t,^.,  r.l^^*'^^^'^   ^®  pleased  to  receive  a  summary  of  the  information 
you  get  in  response  to  these  questions." 

«r  Atw  ii'^^l   "^  bonuses,  profit  sharinga,  stock  ownerships 
or  other  monetary  considerations  to  our  employees. 

«i-  '^®  v^^®  *  benefit  fund  from  v»hich  we  make  loans  to  em- 

ll^rif  !?L^r  ^"  financial  need.  This  fund  is  obtained  by  the 

?«  J  .ov^^K^"®!  ^*  J^educed  prices  to  our  own  ettployees,  that 

obk7Lf  ?r,  JkT  *°  P^y  ^^  *  °°Py  ^°^  25^  magazines  and  all  funds 
ODtalned  in  this  way  are  turned  into  the  benefit  fund. 

fefinv^r?!?^^*'*®^^^'--®®  *°  °^^^°®  workers-clerks,  stenographers, 
£5  nn^fffl  etc. -average  nearly  50^  higher  than  in  1914.   We 
iJj  n?  Itit^   organization  at  that  time,  so  there  is  no  possibil- 
me  to  d«SiJ!!fno  <^0"'P«i3«n  in  that  line.   It  isn't  possible  for 

eL?Lr!!^^2®  ''^^^  ^^^   *^^®"  Pl*°®  ^n  *^e  other  classes  of 
employees  that  you  name. 

a«^  «i!5-.?°5®  l^f*  *^^®  information  may  be  of  some  help  to  you 

•M" 

♦«  ,.   "^plying  to  your  circular  letter  of  August  30th.  piir  reply 
to  your  questionnaire  will  probably  not  be  of  much  asliftlnJe  tJ 

our  fa«?orrL^  firm  of  Consulting  Engineers  at  work  reorganizing 
to  glve^J  reS?S!  ''''''^  ^^  "°*  sufficiently  advanced 

were  l^Jri,,^* ?h  Jo-f^rly  used  bonus  and  premium  systems,   which 
7^5L       wf    ?*®'^  "^"^""^"S  the  war  period,     Neither  are  in  effect 
pewIrmaSe^  eventually,   to  establish  bonus  for  Individual 

ft«mr»..J!f?f*   3  -  We  come  under  the  Ohio  State  Insurance  Act.   which 

■Ans,   i  -  Probably  lo^  to  25^. 
■Ans,   4  -  Probably  25%  to  50^ 


15-H 


fQ 


V 


''Ane*  5  -  25fo  to 
•'Ans,  6  -  35fa  to  bOfo^ 

••Your  favor  of  August  30th,  is  at  hand  with  several  questions 
whioh  we  are  pleased  to  answer  as  follows: 

"Referring  to  question  No,  1;  we  have  never  done  anything 
along  the  line  of  such  distribution  as  you  mention  in  this  ques- 
tion, except  to  make  a  voluntary  distribution  at  Christmas  time* 
This  is  not  a  guaranteed  distribution,  nor  is  any  amount  sett  it 
depends  upon  the  business  of  the  year,  and  is  made  on  a  percent- 
age basis  of  the  wages  or  salary  drawn  by  the  employee  during  tne 
year. 

"Referring  to  question  No.  3;  we  have  not  done  anything 
regularly  along  the  line  of  advancing  moneys  to  employees.   We 
have,  however,  in  some  instances  helped  an  employee  "to  buy  a 
house,  and  intend  to  continue  this  with  any  employee  of  the 
right  character, 

"Referring  to  questions  No.  3,  4,  5  &  6;  we  would  say  that 
these  increases  have  ranged  anything  from  25  to  70?b  according 
to  the  merits  of  the  work  and,  mostly,  due  to  necessity  thru 
increased  cost  of  living  over  the  years  since  1914, 

"We  would  be  very  glad  to  hear  from  you  as  to  the  information 
that  you  collect  in  tabulated  form,  and  trust  you  will  not  fail 
to  send  this  to  us." 

"0" 

"It  has  been  our  policy  to  take  care  of  our  salaried  em- 
ployees in  a  big  broad  way  and  to  n^\e   their  claries  liberal 
based  upon  all  costs  of  living.  We  look  upon  o^^  salaried  em- 
ployees as  being  very  valuable  assistants,  and  this  is  always 
considered  when  wage  adjustments  are  made." 


up 


"No.l 
"No.  3 
"No,  3 
"No.  4 
"No.  5 
"no.  6 


None 
No 
87fo 
92^0 

57% 


"We  desire  to  express  ourselves  as  in  thorough  sympathy 
with  the  movement  which  you  are  planning,  to  bring  about  better 
conditions  as  to  compensation  paid  office  workers  generally. 

"The  present  situation  is  a  shame  and  a  disgrace  and 
should  be  remedied  without  further  delay. 


16-H 


r 


"It  is  a  subject  that  we  have  given  a  great  deal  of  con-* 
sideration,  and  we  can  say  frankly  that  we  are  not  at  all  satis- 
fied with  the  answer  we  have  made  to  your  question  No.6^  but  it 
is  a  matter  that  is  having  serious  consideration  and  will  be 
remedied  very  shortly  in  our  establishment. 

■We  do  not  believe  in  any  plan  of  bonus  or  profit  sharing, 
or  any  other  consideration  calculated  to  take  the  place  of  wages 
Employees  should  be  paid  what  they  can  earn,  based  upon  the  pur- 
chasing power  of  money  today,  and  we  are  seeking  to  follow  this 
policy  in  our  plan  of  management. 

■We  shall  be  very  glad  to  have  a  report  from  you  when  your 
survey  has  been  completed,  and  if  in  the  meantime  we  can  serve 
you  further,  please  do  not  hesitate  to  let  us  know. ■ 

tQt 

■TI7e  acknowledge  receipt  of  your  favor  of  the  30th  ult.  and 
advise  that  we  do  not  employ  a  profit  sharing  or  bonus  system, 
second  we  aid  and  assist  in  securing  homes  or  help  in  time  of 
trouble  where  necessary;  third  the  increase  is  approximately 
lOO^t   This  includes  all  of  the  various  classes  which  you  have 
mentioned^ ■ 


•ton 


R' 


we 


■In  response  to  your  circular  letter  dated  August  30th, 
enclose  herewith  a  categorical  response,  and  am  very  much 


interested  in  seeing  the  summary  of  the  replies  you  receive* 

■This  problem  is  most  perplexing.  Any  analysis  we  have 
been  able  to  make  fail  to  give  ms  any  satisfactory  solution.   Ar- 
bitrary increases  to  even  approximately  adjust  living  wage  would 
put  us  out  of  business,  and  yet  it  is  upon  these  people  we  are 
dependent  for  the  very  bone  and  sinew  of  our  business,  and  we 
hope  that  the  investigation  you  are  making  will  give  us  some 
light  •  •* 

■l.   We  have  no  specific  bonus  rate  but  have  distributed 
approximately  10^  of  their  annual  salary  to  our  executive  em- 
ployees and  clerical  assistamts.   This  would  probably  represent 
about  13^  to  145&  of  the  1914  compensation. 

■2.   We  have  no  prescribed  method  to  meet  this  condition, 
but  are  making  special  exceptions  in  each  case  as  they  may  arise, 
recognizing  that  home  ownership  metkes  a  better  employee. 

■3.   No  increase  whatever* 

■4.   Varying  from  lOfc   to  15fo. 

■5.  The  compensation  to  salesmen  depends  entirely  upon  the 
selling  price  of  the  article,  either  on  a  commission  or  straight 
salary  basis  their  earnings  are  parallel  to  the  amount  of  the 
sales,  and  the  added  volume  of  business  has  increased  their 
compensation  50>. 

17-H 


■6,   From  30^  to  20%,  " 
(Secretary's  remarks  continued) 


A         w  J   The  Underwood  Typevnriter  Co.  send  me  pamphlets  cover- 
ing their  Profit  Sharing  Plan,  and  as  it  is  in  print  and  has  been 
described  in  the  Public  Press,  I  think  I  may  mention  their  name 
in  connection  with  a  description  of  it.  Their  plan,  in  effect, 
is,  or  has  been  for  the  last  three  years, as  follows: 

or,^  A*   4^  After  providing  for  regular  depreciation  charges,  taxes, 
and  dividends  of  7%  on  the  preferred  and  6%  on  the  ciammon  stock 
*   ,4   company,  20%  of  the  remaining  net  surplus  is  turned  over 
to  five  Trustees,  who  deposit  it  with  a  Trust  Company  and  open 
cL^onwi  *?  ^^®  °''^'^"  °^  ®^°^  employe  who  has  been  with  the 

rt?  ?^L?L*"°  ^f^'®  °f  "*°^®*  ""*«  division  is  made  on  the  basis 
or  length  of  service,  viz: 


5  parts  to  those  employed  5  years  or  more 


years 
a       -  -       '  *  2-3  years 

-4^„+  , tl  ^^2^  !i®  *^®  deposits  of  an  employee  reach  a  suffi* 

ci«!^Lf^  ^**  the  Trustee  will  invest  it  in  Common  Stock  of  the 
T'?«^^^*!°v4'*^^°^.'^m®  "^"^^   f^°°^  certificate  is  issued  and  de- 
ia«^  V  il  ^^"^'   ^^^   Treasurer's  dividend  checks  are  issued  to 
each  holder  quarterly. 

n«  «.^4.,,  V*®  ^^   inducement  for  an  employe  to  retain  his  stock, 
an  extra  bonus  was  given  during  the  first  two  years  the  plan 
r+Lj  °P®'a*io'i*  e<l^l  to  the  amount  of  the  dividend  on  the 
V.fi^JL^^T'l''^^'   o^°^  ^^^^»  "  «as  announced  that  the  distri- 
r^i™r!*-^n  ^!  ^"  ^^"^"^  ^*°*^^'  i^  obtainable,  or  the  U.  S. 
t?L  ^!?i  ^J"^'   °'  ^*^'  ^"'^  ^   *^e  stock  was  earning  substan- 
ii  4r.^I;^  ^^'  no  extra  credits  would  be  given  on  it,  but  as 
IS  ;^»?^  ir  ^^L^**!  retention  of  the  bonds,  an  extra  amount  of 

t1ent\'lJ\?lTJilfr'Son"L\'"^'°^^^^  ^"  ''""""^^  ^'  ^^^^  ^^° 

«f  +K^  *  ^}  ^^   further  provided  that  any  enploye  who  sells  any 

Sill  be^5?=L^f-^''5%^^^*'®'^  *°  ^^"^  "^'is'^  ^^^   Profit  Sharing  Plan, 
will  be  discontinued  from  sharing  in  the  profits  for  one  year. 

to  the  etolv  !?f^?>,!"p®'"P^°y®  ®^'®'  ^^  ^3  permitted  to  subscribe 
his  Snus  anS  hI5,  .5?'"^^''?  ^'^  additional  amount,  not  exceeding 
tionrJrft'm^^f  deductions  from  salaries  to  pay  for  such  subscrip- 
aj  SI  Jfor^Jf..!?  amomitB   as  the  employe  may  elect.  Interest 
to  his  IreSt!      ®^°^  employee  annually  on  the  total  amount 

bulletin  Jh»^pl^®*^"^  ^^®  operation  of  the  Plan  in  a  recent 
Sr  diaJjiStiS'^^"^  announces  that  it  has  paid  to  the  Trustees, 
lor  distribution  among  the  enployees,  as  extra  compensation, 

18-H 


J393.000  for  1916^  J327, 000  for  1917  and  ^SVe.OOO  for  1918.  or 
in  round  numbera,  5l,0C0,00C  for  the  three  years.   During  the 
same  period  the  employes  subsoribed  to  stock  having  a  total  value 
of  over  a  quarter-million  dollars,  and  a  total  of  over  11.000 
loa^^l   *£/*°°^  y^^°   issued  to  them  in  these  three  years.'  Over 
93^  of  this  stock  is  still  in  its  original  hands,  3^  was  sold  for 
Sickness  and  other  good  reasons,  and  6%  on  account  of  employes 
leaving  the  Company. 

..    ^  ,  "^^   point  that  is  worthy  of  note  here  is  that  some  of 
the  stock  distrjtutions  of  the  sort  referred  to  above  are  doubt- 
less made  from  Treasury  Stock  -  instead  of  a  ^vithdrawal  of  cash. 
•pjf.^y'^^-''"v  i^  capitalized,  and  remains  to  strengthen  the  business 
This  is  substantially  what  is  advocated  by  George  W.  Perkins,  and 
IS  the  plan  tnat  has  been  adopted  by  some  Companies,  with  which 
he  is  connected  and  which  has  proven  very  successful  with  them. 

««^*4  4.  *  ^ile  tlie  Ford  Motor  Company's  method  of  apportioning 
profits  to  salaried  workers  is  not  mentioned  in  the  letter  vthey 
sent  me,  it  is  described  in  a  pamphlet  on  Profit  Sharing  which 
the  Government  published  in  1916. 

rt4«i^«^  4  ^^"^fu   *^®  original  Ford  plan,  salaried  workers  were 
^  3i  !v   .°   *^^®®  classes.   First,  those  who  were  paid  $175.00 
?Ao°  Jh:,«"«i?rnA  s®°o"'i»  *^ose  whose  salaries  were  ^75.00  and 
less  than  $175.00  a  month;  and  the  third  class  ran  over  ^^30. 00 
and  less  than  ^75.00  monthly  -  there  are  probably  not  many  in 
this  class  today. 

rnT.«.=,™a>M??Q??T®5S"®"**^  pamphlet  states  that  for  "last  year" 
(presumably  1915)  79  executives  in  the  first  class  got  $313,000, 

mLf?^^^''^S®  °^  ^^'^^^  ^2500  each;  340  employes  in  the  inter- 
?n  ih!%°  f  '^oeived  ^367,000  or  about  |l500  each;  and  1050 
in  the  lowest  class  got  $346,000,  or  roughly  ?350.  each. 

oai  =  ,.4«.«  ^^^^   *^®'®  ^^  nothing  to  show  the  total  amount  of 

IS  avprLrJ^v.  *».®''®fl**^''®^  ^"  *^®  highest  class,  if  we  strike 
an  average  for  the  other  two  classes  and  compare  the  profit  re- 

iJ!^L  ?v,*  percentage  basis,  it  woiold  appear  that  Ford  has  fol-1 
i«ot  T.:i!o?®  ®2°^^°"S  manufacturers  that  a  study  of  the  sub- 
^?Sfitr*^^!i  ^^   ^^''^"S  the  largest  proportionate  share  of 
l^llll   «?  the  executives  and  higher  salaries  men  to  whom  the 
st^??^?v  1  ^^u^'^V^  largely  attributaftie.And  that  is  sub- 
stantially what  Mr.  Felt  claims  in  his  pamphlet. 

a  bnnu«  r,i^®.^°^'^^  Process  Co.  has  both  a  profit  sharing  and 
?anS  lr?m^h?2/P^'^*i?'^-   ^'"^^^^  ^^^  former  the  participants 
intf  thrp^  °?i®^  executives  down  to  sub-foremen  and  are  divided 
chief  executlvf.^;-  ^"  *!»«  Senior  Class  are  included  only  the 
Clals  ?he  ciTff  ^^''®f^  t"^  °^^^^  teohnioa:i  men;  in  the  Junior 
deS^tments  aif  ti^°*''"^''^^  assirtanto.  the  foremen  of  important 
ClJss  aS  otS«ra  ?f  T""^   irnpcrtant  office  men;  and  in  the  First 
v-iass  are  others  to  Junior  clerks  and  sub-foremen. 

19-H 


The  Seniors  receive  three  times,  and  the  Juniors  twice 
as  much  as  the  First  Class.   The  Directors  of  the  Company  elect 
the  members  of  each  participating  class  and  each  participant  has 
a  formal  contract  with  the  Company,  which  fixes  the  basis  of  the 
participation  and  the  obligation  of  both  parties. 

There  is  also  a  bonus  system,  v^iich  is  not  contractiaal, 
and  does  not  depend  upon  the  profits,  the  amotint  to  be  distri- 
buted being  decided  upon  by  the  Directors  each  year#   This  applies 
to  all  employees  who  are  not  members  of  the  participation  classes, 
the  distribution  ranging  from  2$   for  two  years^  to  6^  for  10  or 
more  years  ^  continuous  service,  of  the  salary  earned  dxiring  the 
preceding  year,  and  is  paid  in  a  lump  sum. 

There  is  also  a  pension  fund,  maintained  by  the  company, 
and  a  Sick  Benefit  Society  to  which  the  men   and  the  Company  con- 
tribute equal  amounts.  Aside  from  this,  the  Company  has  always 
paid  hospital  expenses,  and  specialists'  fees  in  the  case  of 
injured  employes t 


SUMMARY 


A  summary  of  the  replies  received,  discloses  that  tinder 
the  first  question,  "Profit-sharing,  Bonuses,  etc.",  out  of  25 
replies,  4  have  absolutely  nothing  of  this  kind;  3  are  silent  on 
the  subject,  having  answered  me  in  a  very  general  way;  and  19 
are  either  considering  or  have  some  sort  of  bonus  or  profit-shar- 
ing plan  now  in  operation* 

On  the  second  question,  as  to  what  other  help  they  gave 
their  employes:  Out  of  the  85  there  are  3  who  give  no  help  of 
any  kind,  4  were  silent  on  the  subject,  and  19  give  the  employes 
various  sorts  of  help  as  are  outlined  in  these  letters. 

Then  when  it  came  to  the  more  personal  questions  of 
Compensation,  on  the  third  question:  "What  percentage  of  increase 
over  1914  salaries  do  you  pay  your  executives,  managers  of  sales, 

production,  etc.?" out  of  35,  8  did  not  submit  any  information; 

3  were  indefinite,  said  in  a  general  way  that  their  employes  were 
helped  largely  and  liberally;  only  3  say  that  they  have  given  no 
increases  whatever  to  their  executives  since  1914,  That  leaves 
13  who  report  increases  anywhere  from  10  to  100  percent.   I 
averaged  up  the  13 I  could  only  average  by  the  number  of  con- 
cerns reporting,  not  having  anything  to  show  the  actual  number  of 
executives  who  are  affected  by  the  situation.   But,  based  on  the 
figures  given  me,  it  shows  an  average  increase  to  executives,  over 
1914  salaries,  of  55  percent, 

0^  ^he  fourth  question,  asking  for  the  same  information 
with  relation  to  assistants  or  minor  executives,  the  proportion 
was  the  same:  8  gave  no  information,  3  were  indefinite,  and  only 
1  said  that  he  had  made  no  increases;  14  have  granted  increases 


20-H 


running  from  10  to  100  percent,  and  those,  figured  i»  "the  same 
way,  show  an  average  increase  of  56  percent* 

The  fifth  question  relates  to  the  increase  in  compensa- 
tion to  salesmeni   Out  of  the  35,  9  did  not  submit  any  informa- 
tion, 2  were  indefinite,  and  14  said  that  the  sales  forces  were 
increased  from  25  to  1,000  percent •  I  did  not  use  the  1,000 
percent  because  it  is  such  an  unusual  case  that  I  thought  it 
would  hardly  show  a  fair  average  figure.   But,  putting  that  con*- 
cern»8  figure  in  at  300  per  cent,  it  would  give  an  average  in- 
crease to  salesmen  of  about  80  per  cent  on  the  1914  figures. 
That  is  probably  true  because  in  many  cases  the  sales  forces  are 
on  a  commission  basis;  and  even  though  a  salesman's  percentage 
of  commission  has  not  been  changed  at  all,  the  fact  that  most 
products  are  selling  for  anywhere  from  50  to  200  percent  higher 
thstn  in  1914,  would  automatically  increase  the  salesmen's  re- 
turn accordingly^ 

The  last  and  sixth  question  relates  to  increases  for 
general  office  helpt  Only  6  did  not  submit  any  information  at 
all  on  that  question,  2  were  indefinite,  and  17  said  that  the 
increases  ran  from  12  to  100  per  cent;  the  average  there  would  be 
50  percentt 


CONCLUSIONS 

Now,  of  course,  you  gentlemen  are  at  perfect  liberty 
to  think  these  things  over  for  yourselves  and  talk  t]^em  over, 
but,  as  I  have  had  these  papers  for  some  days  and  have  had  a 
little  more  opportunity  to  study  them  than  you  have  had,  I  just 
wanted,  before  sitting  down  and  letting  you  go  ahead  and  talk, 
to  give  you  my  conclusions  in  the  matter  which  1  merely  present 
for  what  they  are  worth  and  which  perhaps  may  form  some  basis 
for  discussion. • 

First  of  all  it  is  manifestly  impossible  to  formulate 
any  set  rule  for  solving  this  problem  for  any  particular  in- 
dustry or  any  particular  business.   You  can  see  from  the  nature 
of  the  replies  that  the  qonditions  under  which  different  busi- 
nesses are  operating  today  vary  so  much  that  each  man  has  to 
solve  the  problem  for  himself. 

Second,  factory  workers  and  salaried  men  require 
different  treatment.   There  is  a  difference  in  training,  en- 
vironment, habits  of  thought  and  habits  of  action,  between  the 
two  classes,  which  I  think  demonstrate  the  need  for  a  difference 
in  handling.  Most  of  us  know  what  the  ^"^orker  wants — you  see  it 
expressed  every  day  in  fresh  demands;  and  as  a  rule  he  wants  it 
coming  to  him  every  week  in  the  weekly  pay  envelope. 

Some  of  the  concerns  who  have  written  me  seem  to  have 
adopted  profit-sharing  in  the  form  of  distribution  of  stocks  to 

their  factory  employees but  I  think  that  that  is  rather  in 

the  nature  of  an  experiment,  and  I  do  not  believe  that  the  mat- 
ter has  been  carried  on  long  enough  and  by  enough  companies  to 

31-H 


show  that  It  is  really  a  permanent  solution  of  the  industrial 
situation,  30  far  as  the  factory  worker  is  concerned. 

The  same  might  be  said  of  bonuses  '^^°\^'^?J^^^L°J!°'' 
ftf  twice  a  vear.  and  althotigh  some  concerns  seem  to  have  oeen 
sScoessful  with  these  plans  the  history  of  Profit-sharing  and  the 
Jvidenle  KiJen  in  the  Government's  pamphlet  on  the  subject,  is  all 
lgi?nSttlem  as  a  permanent  factor  ^^  **^%«"S*i°SeS«  rlaUza- 
time  as  the  factory  worker  has  been  educated  to  a  ^**«'  J!^JJe 
tion  of  the  part  he  plays  in  the  economics  of  the  ^oj^J.  J^J^J® 
employer  in  turn  has  learned  that  the  introduction  of  the  human 
element  in  dealing  with  his  men  is  a  vital  necessity  to  the 
successful  conduct  of  his  business. 

But  as  one  concern  brought  out  in  its  letter,  you  are 

all  much  closer  to  the  salaried  man,  much  o^^^^f  *2v*S®h?t  are 
your  offices  and  on  your  staff;  you  know  what  JJ^  thoughts  are, 
and  you  can  reason  with  him;  and  I  do  believe  **^^t  the  salaried 
class  can  be  taken  care  of.  The  most  Pf^o^^oal  solution  of  the 
situation,  it  seems  to  me,  where  there  is  sufficient  income  in  a 
concern  to  permit  it  would  be: 

First.  -  to  have  standard  rates  for  each  Position  or 
each  class  of  work,  based  on  the  1914  value  of  the  <iollar,  not 
aTsalaries  are  today,  and  subject  only  to  s^oh  increases  as  are 
usually  made  after  an  employe  has  been  in  a  Po^i^ion  long  enough 
Ul^come  more  proficient  and  to  deserve  a  grater  return^  and 
let  his  main  incentive  to  getting  more  salary  be  through  a  pro 
motion  to  a  place  higher  \q). 

Second,  -  to  make  a  reasonable,  temporary  Jllowance, 
such  as  one  or  tw  of  these  companies  say  they  have  been  doiJ|' 
to  meet  the  present  abnormal  living  expensef  '^ifj  °°Sch  iould 
ate  with  the  rise  and  fall  of  commodity  ^»iYt?An«  rJasert  ?hem- 
eventu&lly  be  dispensed  with  as  normal  conditions  reassert  tnem 

selves. 

Third.  -  to  give  the  salaried  worker  a  share  in  the 
profits,  along  the  lines  of  the  Un<ier*ood  Typewriter  plan,  or 
the  llrkin  ulan  v«hich  company  is  located  here  in  Buffalo.     I 
wSSl^likJ  llTv  mlcfto  S^ow'what  the  Buffalo  pec^lethink^of 

-ry^?»5y!  LThl  IJSnr^^nlf  reTr|a    K^^ 
The  principal  features  of  the  plan  are  as  follows. 

Assets  of  the  Company  on  Jan.  1,  1919.  were  stated  to 
have  been  well  in  excess  of'^fSCOOO.OOO,  with  no  Good  Will  Ac- 
coSt  included.     It  is  proposed  to  organize  S"®*  °°^°^f  i^""* 
S?S  $30,000,000  first  Preferred  Stock  (all  of  which  goes  to 

present  owners)  and  $30,000,000  Second  Pr«f«"jJ.J"*  °°S|?3°Lcl 
which  only  3lO.000.000  will  be  issued  now  (to  Pr^^ent  owners  ana 
ImpSyeS  the  remainder  to  remain  in  the  Treasury  to  be  issued 

33-H 


fJr'°iJi"?„J*!  !^5®  *?  °°'®'  profits  retained  in  the  busires 
;fL^!!-ty*y'®  development,  and  for  gale  to  employes  linder 


tain  conditions. 


oer- 


-.r' 


in   TQiQ.  K?f  ^l^   ^J|^®"®<^  Stook  shall  p«.y  a  divijjoa  oi  js 

ie  n?i?i.5L^"  ^!^'  ^K^""   ^^2^'  ^"'i  7^  thereafter.  It  shctli" 
oK=?f  "5^*^  ^!  ***  assets,  and  oumulative  as  to  dividends,  but 
S«  io??L  !J^f^f,'  partictpate  in  the  profits  of  the  CoinpaAy. 
TJe  voting  privilege  shall  be  with  the  common  stock,  provided 
iJniho  i^®J®"®^  dividends  are  defaulted  for  12  consecutive 
paid  Si.     "     """^  """^  ^^^°  ''''^^   ""*^^  *^®  dividends  are 

1920  «^nH  J®*S"^  Preferred  Stock  shall  pay  a  dividend  of  SjS  in 
i?t2r^?«  f-^^r^^^^®""'  ^^^  «^*11  ^   preferred  as  to  assets 
areon^v  nftfM.  If®''^®?,*  1""^  cumulative  as  to  dividends,  which 
S?rt   T+^-?f?n®v.^'^®^  *^^  ^^'^*  Preferred  dividends  have  been 
paia.  It  shall  be  issued  only  under  the  following  conditions: 

Stork-  m„=i-^L°^^®  of  dismissal  or  voluntary  Withdrawal,  linploye 
cJSS«.^^  ^  deposited  with  the  comi|M«Byfor  purchase  aid  the 
fn  exchan^I  nf  I  ^*^'S*  i"  °^"^J  wi^ix  months*  note;  or  by 
the  CoSj^f %$  .?®*°"^  Preferred  Stock,p  the  purchase  price  of 
CnLf«^^"  ?*°^^  J°  ^®  ^^''^^  e^°^  year  by  the  Directors.  All 

sSe  a?  fir^i^i^'^^lf""'^  Jy  i^^  ^^"P^'^y  «^^11  ^«  subject  to  rilis- 
sue  at  the  discretion  of  the  Directors. 

ft^  ♦^  =  ^  Common  Stock  shall  not  be  sold  except  to  the  Oompany 
Snt  L«  J!'?^  eligible  to  hold  Common  Stock.   Dividends  shall 
TeLlntnlM^  annually,  nor  shall  they  exceed  50^  ?f  Se  pKf  its 
feJred  Stocks r  °''®  ^®*'      payment  of  dividends  on  thS  Pre- 

««a^^  4.^  4°'  *^!  $10,000,000  Common  Stock  to  be  issued  it  is  pro- 
«n  *?  *K  if3«e  to  each  Charter  Employe  an  amount  proportioned 

??ml«^h^i^°'  H^"^   °^  *^®  ^*^^y  ^^l^'y  as  of  jLuary  1?  1919, 
«i^!%i?  /?f ""^  of  employment,  less  three  years.  The  result  will 

S  r.i5?«J'*^i^'^^°£  ^*e°^  *°  ^«  ^s^^®**'   I«  determining  the  years 
ifs?  e^?o4™^^  ^it  t\^^l   ^  reckoned  from  the  beginning  of  the 
i«f>>!^^y3^*,?^*^  *5®  Company,  except  that  if  interruption 
JfSn^^^  du^olding  of  public  office,  for  educational  p?epara- 
U^X.  o^  marriage  (if  women)  the  time  shall  be  merel?  deducted. 
gfrSd.    *®^i°^  o^  illness,  the  interrx;5)tion  shall  be  dlsre- 

.  „  ,     After  the  amount  to  be  Issued  to  Bnploye  Stockholders 

S?ocik'«Lf?*r'"J"^'*'/^^  remainder  of  the  .1^i0^oSo!oOO  OomSJn 
Stodk  shall  be  issued  to  the  present  owners  of  the  business? 

w&a  R  ri*itS^^l^^^   anploye  shall  be  one  who  on  January  I,   1919, 

sSvtce  ind  i^f^^rfS  °*  ^Se>  had  completed  three  years 'of   ' 
service,  and  was  not  then  a  stockholder. 

^oo-4„^   Eteployes  under  21  years  of  age,  or  not  citizens,  will 
receive  their  apportionment  of  stock  uSd^r  this  plan  as  soon  as 

33-H 


the  disability  is  removed;  provided  that  aliens  shall  apply  for 
citizenship  within  six  months  of  the  publication  of  this  plan  or 
within  six  months  of  their  employment,  and  shall  prosecute  their 
claims  without  delay. 

Any  Eligible  Bnploye  Stockholder  (determination  of 
Eligibility  is  described  in  a  subsequent  paragraph)  and  any 
present  Employe-Stockholder  may  purchase  Common  Stock  yearly  to 
any  amount  equal  to  305^  of  his  yearly  salary,  provided  that  the 
Directors  have  appropriated  sufficient  stock  for  this  purpose, 
otherwise  the  sale  shall  be  on  a  pro-rata  basis* 

After  payment  of  Preferred  dividends  the  remaining 
profits  shall  be  distributed  by  the  Directors  as  follows: 

(a)  For  the  purchase  of  Common  Stock  on  deposit,  assigned 
by  retiring  employes, 

(b)  For  temporary  use  in  an  unusual  expansion  of/business, 
which  shall  not  exceed  30^  of  the  total  profits  of  the  year. 
The  total  reserve  not  to  excead  Z0%  of  the  capital  stock  out- 
standing. 

(c)  For  the  dividend  on  the  Conmon  Stock  to  be  paid  quarter- 
ly during  the  Aasuing  year* 

(d)  For  the  retirement  of  Preferred  and  Second  Preferred 
Stock  (which  are  callable  at  any  time  on  50  days*  notice  with 
the  option  to  First  Preferred  stockholders  of  taking  Common 
Stock  in  exchange)  and  for  the  purchase  of  Common  Stock  offered 
by  present  owners* 

The  remainder  of  the  profits  for  the  year  shall  be 
distributed  in  Common  Stock  at  par  to  Eligible  Employes  for  that 
year,  and  preiB^nt  owners  of  the  business  pro  rata  to  average 
salary  of  the  previous  year* 

Eligibility  to  profit  sharing  shall  be  determined  as 
follows:  On  January  1,  1930.  lists  of  Charter  Employe  Stock- 
holders, and  other  employes  who  have  since  qualified,  shall  be 
made  up,  sub-divided  into  convenient  groups  at  the  home  office 
and  branches* 

These  lists  shall  be  passed  upon  by  the  Directors  and 
employes,  each  person  on  the  several  lists  to  be  voted  upon  by 
all  persons  on  such  list  and  every  person  receiving  the  approval 
of  90^  of  the  persons  in  his  group  (and  presumably  also  the 
Directors)  shall  be  considered  an  Eligible  Stockholder  for  1919, 
and  to  this  list  a  share  of  the  profits  shall  be  distributed  in 
the  form  of  Common  Stock  as  previously  noted*,  - 

New  lists  shall  be  made  in  the  foregoing  manner  each 
year,  with  right  of  appeal  by  anyone  failing  to  receive  the 
requisite  vote  and  an  opportunity  is  given  for  the  publication  of 

-34-H 


charges  against  stoh  a  person^   The  Directors  may  declare  a  per- 
son a  permanently  Eligible  Employe  Stockholder  after  he  has  re- 
ceived the  unanimous  vote  of  his  group  for  three  successive 
elections t 

Upon  disability  following  35  years  service,  or  after 
reaching  the  age  of  65,  either  voluntarily  or  at  the  discretion 
of  the  Board,  an  employe  may  retire.   He  shall  then  deposit  all 
hie  stook  with  the  Oompany,  under  the  following  plan: 

That  which  he  has  purchased  will  be  treated  as  stock 
under  the  Voluntary  Withdrawal  procedure  previously  described. 

Upon  that  which  he  has  obtained  by  virtue  of  being  a 
Charter  Employe  or  through  subsequent  stock  dividends,  the  Com- 
pany shall,  if  a  fund  has  been  created  for  the  purpose,  pay  bfo 

annually,  in  addition  to  the  usual  dividends,  durihg  the  whole 

•  I  -,   -  •.  - ' '  - .  •  *   •  ■  ■    *  '. 

installment  perioa,  without  reference  to  the  fact  that  the  owner's 
interest  is  dirainiching.   Dividends  may  be  reduced  to  pro  rata 
of  unpaid  remainder  at  death  of  owner,  or  may  be  continued  in  full 
during  the  life  or  years  of  minx)rity  of  a  legal  dependent,  or  un- 
til the  shares  are  liquidated*   Dividends  shall  be  reduced  to  pro 
rata  of  unpaid  remainder  if  the  law  provides  the  Employe  with  an 
industrial  pension  .Stock  liquidated  under  this  plan  shall  revert 
to  the  treasury  for  re-issue. 

No  cognizance  is  taken  of  the  gainful  occupation  of  a 
retired  stockholder  whose  income  therefrom  does  not  exceed  50^  of 
his  salary  during  the  last  year  of  his  employment. 

The  Company  may  grant  a  similar  plan  of  liquidation, 
at  its  option,  to  one  employed  less  than  25  years,  leaving  for 
retirement. 

In  case  of  death  of  an  Employe  Stockholder  the  Company 
"^f]^vi^  ^^®  discretion  <*aXl  the  stock  as  in  case  of  voluntary 
withdrawal,  or  it  may  proceed  with  the  heirs  of  the  deceased  in 
the  same  manner  as  with  the  retiring  employe* 

(Secretary  resiomes  discussion) 

The  Directors  of  the  Larkin  Company  acknowledge  that 
the  success  of  a  busine^ss  does  not  depend  merely  upon  good  will 
and  equity,  but  that  it  depends  upon  oepital,  raanagemont,  and 
intelligent  human  endeavor*   Thf^y  have  evolved  the  plan  to  de- 
Iv  ?5^-''^^!'^^y'  citizenship,  eelf-interest  in  tho  Companv,  induce 
thrift  and  provide  for  the  future.   It  aljo  seems  to  after  a 
eeiuuion  of  the  old  age  proposition,  with  which  a  good  many  em- 
ployers are  striiggling.  and  which  is  the  dread  of  every  oon- 
80ientio\jid  salaried  ivorker. 

Finally,  to  a  man  who  declares  that  there  are  no  profits, 

35^H 


I  if?oulcL  say  that  I  do  believe,  from  what  little  I  know  of  these 
things  and  from  my  study  of  hiiman  nature,  that  he  would  get 
sufficient  additional  enthusiasm,  sufficient  self-interest  from 
the  employees,  who  would  regard  themselves  as  part  o^vners  in  the 
btiainess,  so  that  there  would  be  profits  that  he  could  divide 
with  them. 

Now,  that  presents  the  data  that  I  wsis  able  to  get* 

Unfortunately  the  speakers  whom  we  had  plsmned  to  have  had 

other  engagements:  They  were  called  down  to  New  Orleans  to 

attend  the  Convention  of  the  Associated  Advertising  Clubs  of  the 

•orld  and  could  not  be  present;  otherwise  we  had  expected  to 

have  students  of  the  subject  like  Mr.  Bell  of  the  Hydraulic 

Pressed  Steel  Co.,  and  some  others  here  to  discuss  this  matter 
with  you. 

President  Pank:  As  I  said  in  the  beginning,  before 
Mr.  Hohrbaoh  spoke,  I  had  no  idea  what  the  plan  of  the  Plan 
and  Scope  Committee  was.  I  now  realize  that  they  have  opened 
up  a  very  large  subject,  a  very-many-sided  subject,  ajid  I  have 
enjoyed  hearing  Mr.  Rohrbach's  ideas,  some  of  which  I  cannot 
concur  in,  being  on  the  other  side  probably  of  that  many-sided 

subject.  I  have  been  also  interested  in  hearing  the  expressions 
from  the  others. 

Next,  probably,  to  the  direct  labor  question  there  is 

nothing  more  puzzling  just  now  than  to  know  how  to  retain  the 

interest,  the  enthusiasm  and  the  loyalty  of  employees,  in  these 

times  when  some  of  us  are  making  money,  yet  perhaps  not  making 

as  much  as  we  are  credited  with,  after  the  Government  gets 

through  with  us.  I  think  it  would  be  very  desirable  if  we 

might  have  a  discussion,   I  donH  know  how  many  members  of  the 

Society  have  put  into  actual  practice  any  of  these  schemes 

that  come  under  the  head  of  "fixed  bonuses**,  "percentage  of 

profits",  "stock  sales  at  reduced  price",  "pensions",  "sick 

iS'^l^fl^HHinr^fK^^  benefits",. and  so  on;  but  I  do  realize  that  it 
IS  a  subject  that  is  engrossing  the  attention  of  a  great  many 

of  the  companies 1  know  in  the  case  of  our  own  company  that 

we  are  giving  it  very  serious  thought,  and  my  only  fear  in  con- 
nection with  that  company  is  that  they  will  decide  upon  something, 
without  as  grave  deliberation  and  consideration  as  it  sho\ild  have. 

Mr*  Gardner,  you  being  next  to  the  Secretary  In  geo- 
graphical location,  have  probably  absorbed  some  thoughts  that 
you  wish  to  voice.  May  we  hear  from  you? 

Mr.  Gardner:  It  is  a  subject  that  I  think  nearly  everyone 
is  giving  more  or  less  thought  and  attention  to.   Just  what  is 
the  right  plan,  is  a  question.   You  find  men  who  have  given  it 
a  great  deal  of  thought  who  differ  radically.   But  that  it  is 
wise  to  do  something  I  think  there  is  no  question. 

Our  concern  has  given  a  bonus  to  the  employes  at  the 
end  of  the  year,  our  idea  being,  as  much  asanything,  that  it 
might  help  to  hold  our  labor.  If  they  did  not  stay  until  the  end 

26-H 


of  the  year  they  did  not  participate  in  the  bonus;  and  only  for 
as  many  months  as  they  had  been  jn  continuous  service  do  they  get 
it.   We  nave  had  an  old-age  pension  for  many  years,  but  no  sick 
benefits on  trying  that  we  seemed  to  be  in  hot  water  continual- 
ly; committees  were  out  constantly,  and  some  men  would  not  play 
fair« 

We  have  sold  the  men  stock.   One  of  the  peculiar  things 
about  it  is  that  we  have  never  been  able  to  interest  the  Iron 
Moulders  Union  in  any  stock  proposition,  notwithstanding  that 
the  value  has  increased  an^mhere  from  50  to  100  percent.   The 
unions  evidently  do  not  favor  the  proposition  of  going  into 
partnership  with  their  employers. 

1  think  that  with  the  trend  of  the  times  we  should  all 
give  thought  to  the  subject  and  approach  it  gradually,  and  it 
will  work  out  its  own  solution. 

President  Pank:  Mr.  Fishwickl 

Mr.  Fishwick:   I  would  say,  speaking  only  for  the  sales  de- 
partment of  our  company,  that  we  have  had  under  consideration 
for  the  past  year  the  evolving  of  some  plan  which  would  mean 
additional  compensation  beyond  their  salary.   The  company  has, 
for  the  past  three  years,  given  a  quarterly  bonus  to  all  salaried 
employes  of  10  percent j  so  that,  with  the  increases  that  are 
regularly  made  in  salary,  it  means  that  there  has  been  possibly 
an  average  increase  throughout  the  entire  organization  of  40 
percent,  in  the  salaries  of  the  sales  force  since  1914. 

However,  the  whole  problem  seems  to  me  to  be  the  dif- 
ference between  educated  and  uneducated  self^-interest;  you  touch 
every  man  through  his  pocketbook  when  he  works  for  another.   We 
see  uneducated  self-interest  in  the  mass  or  class  movement  de- 
scribed as  •'unionism",  where  no  man  is  interested  in  what  the 
other  man  does  excepting  he  gets  something  out  of  itt   The 
educated  self-interest,  I  would  oay,  comes  from  the  knowledge 
and  perception  of  all  of  the  elements  that  go  to  make  up  business 

today ^tiot  alone  business  but  our  human  life from  which  a 

man  becomes,  if  he  is  fairminded,  increasingly  able  to  differen- 
tiate between  other  men  and  to  allow  to  some  men,  fairly  and  with- 
out prejudice,  a  higher  wage  than  himself. 

So  far  as  the  sales  force  itself  is  concerned,  I  think 
there  is  no  question  but  what  we  are  coming  to  a  point  where 
they  are  going  to  be  participators  in  the  orofits.   Mv  own  idea, 
the  one  which  I  have  been  forced  to  after  studying  both  the  mat-* 
ter  of  straight  ccmmiscion  and  the  matter  of  moderate  or  mini* 
mum  salary,  plus  coronission  on  all  sales,  has  swung  around  now 
to  the  matter  of  a  f\xed  salary,  basad  upon  the  times,  tne  im- 
portance of  the  position,  and  the  ability  of  the  man,  his  length 
of  service  and  one  or  two  other  items,  plus  a  percencage  on  his 

excess  sales that  excess  to  be  detei-mined  by  arriving  at  an 

average,  agreed  upon  with  the  sales  department  as  a  fair  average 

37-H 


or  b\isine3S  for  the  section  in  ^-vUioii  -hio  mdii  works,  and  befng 
paid  to  the  branch  office,  to  be  distributed  to  the  individual. 

My  idea  in  that  is  that  it  should  be  done  that  way  in 
order  to  prevent  the  keen  personal  competition  which  would  come 
rrom  paying  only  on  personal  sales,  which  would  promote,  from 
my  own  experience, a  lack  of  co.-operation  that  would  be  fatal  in 
a  large  organization.  That  is  as  far  as  we  have  gotten.  I  think 
that  we  have  increased  our  sales 'averages  of  compensation  40 
percent,  during  the  war  period*  In  addition  to  that  there  has 
been  last  year  a  Christmas  present  which  we  do  not  count  in  as 
salary  or  as  an  increase.   So  that  I  feel  that  the  concern  has 
fairly  met  the  increased  cost  of  living. 

^4  4.-p*  ->      ^^  ^  agree  with  a  number  of  those  who  say  that  the 
5i    i^  ^  ^®  ^^®  largely  to  the  cost  of  high  living  rather 
than  the  high  cost  of  living,  because  I  think,  taking  the  con- 
census of  those  reports  that  have  been  read,  that  55  percent, 
will  average  fairly  close  to  the  CJovernirient  index  of  the  in- 
creased cost  of  living.   3o  that  the  American  employer,  as  a 
whole,  has  not  been  derelict  in  his  duty  but  has  done  a  fair 
amount  toward  alleviating  trhe  distress  which  might  come  from  lack 
or  increase  or  lack  of  compensation  to  meet  the  rapidly  increas- 
ing prices. 

President  Pank:  Mr.  Hall I 

Mr.  Hall:  As  far  as  oui^  Company  is  concerned,  we  have  made 
a  straight  10-per-cent  bonus  for  the  last  two  years  to  the 
salaried  employees,  right  down  the  line.  The  Company  now  is  al- 
so studying  a  new  scheme  for  a  bonus  proposition  which  has  not 
yet  been  worked  out— I  don't  know  just  what  the  plan  will  be 
because  it  is  not  far  enough  advanced  to  say. 

The  real  secret  of.    the  'fevhole  matter,  to  ray  mind, 
18  that  we  must  keep  the  men  who  are  working  for  us  in  the  right 
mental  attitude,  not  only  from  the  salaried  stctndpoint  bfit  from 
the  standpoint  of  man  to  man  and  treatment  of  the  man  as  a  co- 
*?Iv  L"*^^^  *^®  company;  let  the  man  understand  that  his  part 
with  the  company  is  an  itsportant  part.   If  he  is  not  capable  of 
Handling  the  part  <vhich  has  been  assigned  to  him,  do  not  keep 
him  but  get  somebody  who  will  be  interested.   But  if  he  has  a 
place  in  your  organization,  make  that  place  seem  an  important 
piaoe  to  him,  and  keep  up  his  interest  in  what  he  is  doing. 

„ ,„,^  "^f*  °^"  ^e  io'^e  by  personal  touch,  in  the  smaller 

companies,  it  seems  to  me;  but  even  in  the  large  companies  it 

;!J^f^  *^® "^^   specially  by  contact  through  the  heads  cf  the 

l«f'*2«nh  i^^A  ^*  °^^^y  ^*  '^'^  through  the  heads  of  departments, 
i^^ff"^!!^   5  °^.*  aepartraent  be  in  c3ose  touoh  with  each  man 
of  ?if t  m£n  ITV  ^®*  ^^'^  ^®  familiar  with  the  family  conditions 
♦L*  K  ^  *  -is  far  as  he  can,  so  that  that  man  will  feel  that 

ia  in  trn„HT!''  ^^"^  't  °'^^  ""^°'"  ^®  °*"'-  SO  to  for  sympathy  if  he 
iSt  th«+^?^®\°''\"'^°  °*''  *^^^  o^-^  ^i3  affairs  wixh  hims  and 
let  that  department  head  show  that  personal  interest  in  the  man 

38-H 


that  will  make  the  man  vvant  to  huatle  anl  keep  up  the  interest 
which  Lie   should  have  in  t^e  organization. 

The  point  whioh  I  have  found  ^vorks  out  well  in  handling 
men only  in  the  sales  department,  o^^    course,  is  this:   When- 
ever a  man  is  sent  out  on  a  trip,  it  may  be  a  long  trip  or  for 
two  or  three  weeks,  I  Invariably  ask  that  man  "Is  there  any 
personal  reason  why  you  cannot  leave  at  this  time  and  be  out  of 
the  city,  away  from  home?"  It  may  be  he  would  have  a  sick  child 
or  'rtfe.   Unless  he  goes  out  with  his  mind  entirely  clear  and  bent 

on  business  he  cannot  give  you  the  resiats  he  ought  to  have.   If 
he  is  frank  with  you  he  will  tell  you  whether  he  can  ot  cannot  go.* 
If  he  cannot  go,  it  is  up  to  the  man  who  has  charge  of  him  to 
arrange  to  have  him  go  some  other  time,  and  have  somebody  else 
go  in  his  place.   That  merely  illustrates  what  we  can  do  in 
handling  the  men.   I  think  that  that  is  of  quite  as  much  value 
as  the  money  end  of  the  proposition.   That  is  the  thing  which 
will  bring  the  heads  of  the  organization  in  closer  touch  with 
the  men  working  with  them,  to  ray  mind,  to  bring  about  results 
which  will  be  most  satisfactory. 

1  cannot  say  anything  further  for  our  company  in  this 
matter  because  we  have  nothing  to  offer  in  the  way  of  any  jpian. 

Possibly  later  we  may  have  something  that  will  be  more  concrete. 

Mr.  McHugh:  Mr.  Hall  left  out  an  additional  7-1/3  per 
cent,  bonus  we  had  last  year% 

Mr.  Hall:  Yes,  that  is  true.  A  7-1/3  per  cent*  bonus  came 
out  at  Ohrlstmas  time. 

President  Pank:  Mr.  WatsonI 

« 

Mr»  Watson:  The  custom  with  our  Coraimny  has  been,  on 
salaried  employees,  to  make  certain  percentages  of  increases, 
yearly;  In  addition  to  that,  for  the  last  three  years,  we  have 
had  a  10-per-oent  bonus;  but  we  found  that  a  great  many  of  our 
employees,  in  considering  their  compensation,  if  they  should  get 
an  offer  from  somebody  else,  very  rarely  took  into  account  that 
bonus,  therefore  about  two  months  ago  we  decided  that  the  best 
thing  to  do  would  be  to  make  that  bonus  in  the  form  of  an  actual 
increase  in  salary,  so  that  they  were  sure  of  getting  lt% 

The  department  heads  receive  cash  bonuses  and  also 
stock  bonuses- — all  department  heads  are  stockholders  in  the 
Company,  stock  being  given  to  them  in  the  form  of  a  gift.   T' 
Regarding  ou*  outside  sales  organization,  we  do  not  have  many 
direct  offices,  but  those  offices  are  run  on  a  profit-sharing 
scheme.   We  consider  a  district  office  exactly  the  same  as  we 
would  a  dealer,  and  any  profits  made  in  that  office  over  the  cost 
of  running  it,  are  credited  to  the  office  and  a  certain  percent- 
age of  them  is  distributed  to  the  employees*   That  has  worked 
very  very  well  outside;  it  has  kept  the  men  all  satisfied,  and 
they  have  had  good  returns  for  their  work. 

39-H 


President  Pank:   Has  that  distribution  been 
of  the  relative  salaries? 


on  the  basis 


Mr«  ^atson:  Ye8« 

President  Pank:  No  distinction  as  to  service? 

Kr-i  Watson:  I  might  say  that  up  until  just  a  short  time 
ago  the  manager  only  partioiiDated  in  that  distribution  but  that 
that  has  now  been  extended  to  take  care  of  the  employees  in  the 
office*   The  manager  himself  got  a  certain  percentage  of  the 
profits  of  the  office* 

MTt  Fishwick:  All  heads  of  departments  in  our  company  are 
given  stock.  Instead  of  cash  bonuses,  at  Christmas*  I  omitted 
to  say  that. 

President  Pank:  Mr*  EmenyJ 

Mr.  Emeny:   I  donH  know  that  I  have  any  report  along  that 
line*   This  seems  to  have  developed  more  along  the  line  of  re- 
viewing sales  conditions.   Our  Company  does  not  have  any  outside 
sales  offices.  Our  custom  in  the  executive  or  office  part  of  the 
plant  has  been  to  take  care  of  the  employes  in  the  way  of  in- 
creases of  from  5  to  10  percent  at  different  times  throughout  the 
year,  depending  on  the  condition  of  the  times;  and  that  total 
raise  has  been  very  material^  probably  between  60  and  75  oer 
cent,  since  1914. 

In  the  shop,  our  men  themselves  maintain  an  insurance 
organization,  which  gives  a  death  benefit  and  also,  in  case  of 
sickness,  after  six  days*  sickness  they  participate  in  a  benefit, 
a  certain  amount  each  day. 

During  wartime,  when  patriotism  ^vas  at  its  height,  our 
men  had  a  drum  corps  of  a  pretty  fair  size,  and  from  that  be- 
ginning they  got  the  shop  interested  and  arranged  to  rent  quite 
a  large  building  in  the  torn   which  had  a  very  good  dance-hall 
all  made  up,  formerly  controlled  by  a  German  Organization,  which 
went  out  of  business.   The  Company  takes  care  of  the  rent  and 
assists  in  maintaining  it.   We  find  that  that  is  a  very  good 
thing  for  our  employees;  it  gets  them  together  and  ties  those 
in  the  shop,  in  a  way,  to  the  management*   While  it  costs  us  but 
very  little,  it  all  Tvorks  toward  bringing  about  loyalty  on  the 
part  of  the  men,  and  the  social  feature  is  well  worth  while. 

That  is  about  all  that  we  have  done.   We  are  of  course 
eonsidering,  like  everybody  else,  some  further  development  of  the 
iii#n"»jis  plan  or  some  other  profit  aharing  scheme,  ^ve  do  not  know 
what  as  yet* 

President  Pank:  Mr  #  Reynolds! 

Mr*  Rftynolds:  As  far  as  bonus  goes  in  the  shop  it  does  not 

30-H 


r 


seem  to  work  out  very  tyell;  It  is  ziot  appreoia-^^^J  the  men 
would  rather  have  it  in  a  straight  ^age. 

Mr.  SishT7ick:   The  bonus  proposition  I  donH  think  worked 
out  very  well,  applied  in  the  shop* 

Mr*  Raynolds:   You  have  to  have  your  foremen  with  you,  and 

the  foreman  has  to  see  that  the  employes  are  satisfied;  he  has 

to  get  in  personal  touch  with  the  em]^ioyes  and  see  that  they 
are  satisfied. 

Mr.  Gardner:   We  haven't  a  foreman  in  our  en^^loy  who  is 

not  a  stockholder  in  the  company not  that  that  is  compulsory, 

but  they  avail  themselves  of  the  opportunity;  and  they  are  try- 
ing to  get  more. 

President  Pank:  Mr.  HeermansJ 

Mr.  Heermans:   I  donH  know  about  any  contemplated  plans, 
as  far  as  our  Company  is  concerned,  but.  for  the  last  three  years 
they  have  been  paying  the  salaried  employes  10  percent,  bonus. 
That  was  dropped  a  month  or  two  ago,  and  they  have  put  through 
a  flat  increase  of  10  percent.   That  is  the  only  thing  that  has 
be^n  done  to  take  care  of  the  salaried  employes  aside  from 
regular  raises  or  increases  made  from  time  to  time.   The  shops 
maintain  their  own  mutual  benefit  association,  and  the  company 
helps  them  out;  the  men  contribute  so  much  from  their  wages  into 
a  common  fund,  and  they  have  their  own  organization  to  administer 
it. 

President  Pank:  That  is  purely  a  mutual  organization? 

Mr.  Heermand:  Yes. 

President  Pank:  Mr.  Cone  J 

Mr.  Cone:   My  company,  to  my  knowledge,  never  has  given  any 
bonuses  or  Christmas  pieoonts  or  anything  like  that;  they  have 
treated  everybody  very   nior^ly  about  salaries.   The  first  of  July, 
every  year,  the  list  ie   gone  over,  and  practically  everybody 

gets  an  increase the  idea  being  that  a  man  either  gets  fired 

or  gets  an  increase  on  that  date.   To  thor.e  who  are  capable  of 
the  enlightened  self-mterept  that  Mr.  Fishwick  speaks  of,  I 
think  they  rather  like  to  get  all  that  they  are  going  to  get 
from  the  company  in  the  form  of  a  salary,  because  then  they  can 
spend  it  as  they  pleare.  ?,f   there  are  associations  and  things 
like  that,  the  company  is  really  holding  out  some  of  their 
compensation  and  spending  it  for  them:   I  think  that  it  contri- 
butes to  a  man^s  self-respect  if  he  is  allowed  to  spend  his  own 
salary. 

The  salesmen  that  we  have  get  a  small  salary,  and 


i 


V 


commission  on  everything  that  they  sell; 
sales  get  over  a  certain  amount. 

31.-H 


we  do  not  wait  until  the 


1 


V 


V 


President  Pank:   Thank  yout   Mr.  Wendtl 

Mr.  H.  W.  Wendt:   We  have  not  worked  out  anything  up  to 
the  present  time,  but  the  matter  has  been  under  consideration 
sinoe  I  have  taken  over  the  organization  alone,   I  was  firmly 
convinced  once  upon  a  time  that  it  was  the  proper  thing  to  do 
to  divide  \q)  and  pass  out  stock  at  a  certain  time*   I  thought  at 
that  time  that  I  wanted  to  go  so  far  as  to  include  every  man  in 
the  organization.   The  further  I  have  gone  into  it,  the  more 

I  have  listened  to  discussions  in  different  places I  have  not 

only  talked  with  different  manufacturers  but  with  the  labor 

leaders one  labor  leader  said  to  me  "Don't  you  ever  get  the 

damn-fool  idea  into  youy  head  that  you  want  to  r)as8  out  stock  to 
your  wrkmenj  if  you  -/ant  to  keep  your  men  contented  you  want  to 

pass  that  stock  out  to  them  in  the  weekly  enirgriope" and  I  think 

he  is  right  -  the  more  I  think  of  it,  the  more  I  believe  that 

the  way  to  keep  peace  and  harmony  in  the  organization  is  to 
make  that  envelope  as  big  as  you  can  make  it. 

True,  it  does  not  tie  a  man  to  your  organization  out- 
side of  the  pay  envelope.   If  he  gets  a  stock  interest,  it  earns 
something,  but  later  on  it  may  not  earn  anything;  and  when  it 
starts  to  show  no  earnings,  I  am  afraid  we  are  going  to  be  up 
against  it,  we  who  do  pass  out  the  stock.   So  that  I  am  on  the 
fence,  I  don't  know  which  way  to  jump.   I  want  to  jump,  and  I 
want  to  jump  in  a  very  short  time,  because  1  have  been  talking 
this  for  a  long  time. 

iB  have  advanced  salaries  and  have  tried  to  keep  pace 
with  the  times.   I  don*t  know  what  our  percentage  of  increases 
woiUd  be,  exactly;  I  have  never  looked  upon  it  from  a  percentage 
basis  at  all;  but  we  have  undertaken  to  go  along  with  the  people 
who  are  in  responsible  positions  and  advance  them.  I  agree  with 
Mr.  Cone  here  that  if  a  man  is  not  entitled  to  an  increase  he 
is  entitled  to  do  something  else;  he  is  either  of  greater  value 
to  you  each  year  or  else  he  ought  to  get  out  and  somebody  else 
ought  to  take  his  place.  A  man  standing  ctill  is  like  a  manufactur- 
ing institution  standing  still™ oan^t  stand  still,  has  to  move 
one  way  or  the  other.   If  your  factory  is  not  increasing  or  ex- 
panding, it  is  on  the  decrease.   Which  way  do  3^ou  want  to  go? 
You  want  to  increase.   That  is  what  we  have  always  aimed  for,  and 
what  I  am  going  to  aim  for,  to  increase  the  earning  capacity  of 
the  organization.   You  have  to  keep  peace  and  harmony  among  all 
of  them,  from  the  assistant  managers  right  down  to  the  sweepers. 

There  is  a  benefit  association  at  the  Buffalo  plant 
that  has  been  in  operation  a  great  number  of  years  and  that  pays 
sick  and  death  benefits.   I  take  a  little  interest  in  it,  and  when 

I  lind  that  their  burden  is  getting  a  little  troublesome last 

year  they  had  a  number  of  deaths,  and  I  found  out  ^/hat  their  bank 
balance  was  ana  I  had  the  Company  write  them  out  a  check  to  re- 
instate their  amour.t,  so  txiat  they  would  be  financially  in  good 

standing not  but  what  they  are  financially  in  good  standing, 

for  the  reason  that  they  have  a  surplus  which  I  keep  advising  them 

33-H 


li 


!  i' 


\i 


not 


to  touch  -  it  l9  a  nest-eegg  ctnd  I  want  it  to  increase. 


r 


V 


\ 


T  ^   I    '^'■*®*  *^^^  *^®  plans  of  our  company  are  going  to  be, 
I  don  t  know,  and  I  think  nhen  .-e  get  right  Jown  to  it  that  I 
won  t  have  as  much  voice  in  the  matter  as  my  men  will,  that  is, 

iLTo°fef  th  "^°  ^""  interested  in  the  game;  I  think  I  am  go- 
ing to  let  them  practically  settle  the  situation.   I  believe 

of*«fnnv^K^^^-  *°  participate  in  it.   I  don't  want  any  giving 
tLim  ti^^  "-^.T:   Soing  to  earn  anything;  I  don't  want  to 
that  f L  ?  capitalization  of  this  company  to  such  an  extent 
ca«h.  T  Lfi^'i''^  them  a  lot  of  -vater  and  not  giving  them  real 
t?S\l  Tl\l^   S^''®  ^^^"^   something  that  is  right.   I  am  afraid 
^n^%;  ^!  ^  ®^  1?*"?  °^^®^  *^^^  s*°°^  proposition  is  misleading, 
and  it  is  going  to  have  its  effect  sooner  or  later  upon  the  work- 
n^^Ia  :>,^  not  going  to  be  in  that  class  and  when  that  thing 

^Itt   ^f^*^?  *^®''  ^^®  Soing  to  have  a  dollar  for  every  dollaria 
worth  that  is  presented  to  them, 

n«ao+4^«  ^,"^°"1*^^?°^  *^  ^  °an  say  anything  further  on  the 
ah«f,+  ?i?I  T^:4  Rohrbach  wanted  to  know  what  Buffalonians  thought 

tnS+J^n^  .fe*J^?*P^^?',  ^°  *®1^  y«^  *^e  truth,  I  don't  know 
anything  about  it.   I  know  they  have  a  proposition  over  there 
with  which  they  are  holding  their  organization  intact,  and  they 
are  working  and  making  money;  but  what  their  scheme  4s  and  how 
It  18  panning  out  in  the  way  of  compensation,  I  don't  know. 
T  L  ^^^^i^fv'^^f^^^'^  ^^^^  ^   gather,  without  speaking  knowingly. 
T  ^„^f   !?®  inpression  that  their  wage  rates  are  very  low. 
I  may  be  entirely  wrong  in  that,  however. 

President  Pank:  Mr.  Anderson! 

in«tit»;4«!?'^?f2®"'  ^'aturally,  what  can  be  done  in  a  small 
«t?tv;Ji^Ji   Hv®  °"'^®  "^Sht  not  be  possible  in  a  larger  in^ 
mni^^  ^?'  with  many  employes.   But  I  personally  supervise  the 
St  +  fnr,  «^*-^*'^!^  ^"'^,  ^^Ses  in  ray  plant,  and  with  only  one  ex- 
f?;i2  n   *  2"®  ^^^  *^^®^  "®  ^°^  a  raise  in  pay  in  my  office 
deaJrfi^^L  ♦vr^''?*  J   ^°  ''°-  ''^^  until  a  man  gets  sick  to 
^nflfof  ^P^Qt^i^g  to  happen  and  for  the  boss  to  come  around 
have  Sin %hv!.^^^;   ^  f^^^®  ^^"'-   Sometimes  I  have  had  men  who 

o?Ir  Is  J  o;f®Tf^^^®f  ^"  ^  y®^'^'  ^""^   I  t^i'^^-  tliat  my  labor  turn- 
over is  as  sffictll  as  in  any  plant  in  our  town. 

mPTita  ar-o  L??®^*?  it  that  my  foremen  and  the  heads  of  the  depart- 
Sf  the  niv  tl«t^^°Sf*^®^  ^'^^^y  ^°*  a^^  t^®"  to  discuss  the  matter 

I  gJ  do^^^oler  miMiro^^°.^^?  '^^\^''  ^'^^^^  departments.  When 
D.«++<T^X  X^   ^-   payroll,  as  I  do  frequently,  and  I  see  a  man  is 

fecoiS!  ■  a^d  If  H.°'  ^vhatever  the  ainSunt  may  be-.-I  look  "rmy 
record and  if  I  finct  that  the  man  is  not  gettjna  sufficient 

??^h?er?m/^^"  '^"J^^'  ^^^°^  ^  ^«>'-  frof  this^eSrd  jrtwo 
pJsUion  II  li^l  ?^  ^^^^  *  "^^^^^  members,  I  try  to  put  him  in^ 
position  80  tnat  he  can  earn  uorepay  for  them,   or  let  him  go. 

Without  meaning  to  display  any  egotism,  let  me  illus- 

33-H 


1 


V, 


trate  what   I  am  trying  to  do  to  solve  this  labor  proTDOsition: 
i^^^i^®  *  young  man  on  a  roustabout's   job,   whose  pay  was  not 
very  xarge,    and  who  was j-zor king  as  though  there  was   no  hope  in 
ill  l^  K-,®^^**°  ^^°'    ^on^y.   did  you  ever  stop  to  realize  who 
now?"  ^°^^   "°*  earning  any  more  than  you  are  earning 

f^-ro™?!  ^^^h   "f®^l'   '^o»   ^^^*   I  suppose  the  superintendent  or 
1? T^s'earniS\%!-  ^  ^"''"^  ^"^  ''  ^^  ^^<^  ^*  °-  ^^^  -^^  '^^^^ 

h,i+    sL*^^*^'    "There  is  nobody  in  the  world  to  blame  for  that 

£v  ih^L^^^'   ^""^  ^"T"  J^®""®  ^^  ^  ^<=^  ^o^*^  35  cents  more  a 
SX  Sn+ho$^«y°^'-  a'^^-that  there  is  another  one  for  50  cents, 

youraeii   m  a  position  to  earn  that?" 

"Well,   but  I  don't  know  how,   Mr.   Anderson." 

inat Ji^*  Zl  ^t^^  ^^'^  °^^  *^^"S.      You  are  painting  pumps,    for 

woxK,   wny  wouldn't  it  be  a  good  idea  ^'or  vou  to  naint  thn=o 

?SS?erL"?o'Sf  ff  °"'  ^^^^  ^^*  y^^^  Sen*wh^n'you*gerthose 
?elSv  «A»^$     °  ^^®  foreman  and  tell  him   'Mr.    Williams.    I  am 

these  SartfnL""*"  ^?^^  ^°  ^°''   *"<i  *»e  «ill  ten  you  to  tSe 
these  castings  over  nere  and  put  them  over  there---and  when  you 

ILn^rio  tSf'l  castings  do  it   just  as  quick  II  yoS  canfand 
tj  So!"  °''^"^''  *"^  *^^^  ^^^  ^*^**  y°^  want  somethinrmore 

2S  ?hrWc^''^%°''®-5^  ^^'e^^  ^^ll^'^  '^o  acted 

it     bSt  «^^  «\   f  ^fu"^  nothing  to  the  foreman  about 

and  ^LZ    I  ri  i"tJje  factory  about  two  weeks  later, 

go\'ng'°Se\^Ss1mo1?inJi|)?°^*^^^^^  ''"^  figuratively 
I  asked  the  foreman,    "Is  Tommy  going  to  take  a  vacation? - 
"He  seems  to  be  in  a  hurry",   I  said. 

He  answered:    "no.   he  i«n«+.    t  w^-i*  ^ 
with  Tommy;   something  hal  Ht  U^l  don't  know  what's  the  matter 
my  time  trying  to  thfnv^f^^^J.  Into  him;   I  am  spending  most  of 
that  what  I  "fve  him  ?s  Sniia^?^\^°5  ^^"^  *°  ^  ^^^Sse  I  know 
have  to  haveilJetSnJ^d  reaS?  iTAUr'^^  '^^'  '  ^'^^ 

"Then  you  consider  Tommy  a  valuable  man?" 
"Yes,   he  is  one  of  the  best  men  in  the  plant   today," 
his  pa"J?"*  ^""^  ^°^  ^^^"S  to  do  about  it;  axe  you  going  to  raise 

"Well,    r  thought   I  would  after  a  little  while. " 

34-H 


V 


and  break  ur?htr^?^i''^  *t^®*  ^°"^y  Set   -veary  of  well  doing,   . 
and  thtnl  ?t  4«i^/i^  .S^^^^i^^^^-^^-'   '^""^  ^^  ^^^^  ^i^^  ^^  sit  down 

welk  or  th«  ipfv  f^-l^^^^v.?"^  "^"'^   y°^  ^o  1*  now  -  not  next 
?o Ihe^^gLning  c1'?Sis^feeJf-^  *^^''   ^""  "^^^  ^^  Retroactive 

"All  right,    I'll  do  that." 

in  the  T>laS**a!^^.S**°^^*°"®v°^  *^®  ""^s*  valuable  men  we  had 
in  the  plant,  so  far  as  his  ab^lWAV  ^  ^   things  was  concerned. 

the  time  hL^nli^'^K  ^*^*e">®"*  viust  a  little  while  ago:   That 
cive  irthpf.  ?"^  r^v""  ^^^   "®^  ™*^°  "^"^S®  business  have  got  to 
ff  ?hiL=^i''J°°^^?*'?!^^  °^  *^yi^S  to  pay  attention  to  t  lot 
ofhir  Sfn  ^o  J^®  2"*,^^^®  *^^*  P^*  ^^e™  si^re  and  big  before 
Sen  L  ?;krnj^*i?°r  ^^^^Pl^^  ^^^  problems  with  fheir  own 

they  are  thln??^/«^*^  ^^^  ^"°''  ^^^*  ^^^^  ^^®  ^oi^^g  ^^^  ^1^* 
that  ta  sJl^    ^      ^'""^  reading  about.   I  rather  think  that 

the  stoofc  ^  Tf^l^   f'^'^K®  '"'^w?  ^*^*  '^®"'^*  ^"  «^  SO°d  many  ways  about 
an  int^rplt  11      "*"  buys  his  stock  and,  pays  for  it  he  has  got 
?n  iJ^,^  Jo  !  ""V^l   °^?  ^^^^  i^  y°^-^  gi^e  it  to  him.   I  have  seen 
t^.7..T   *?*\8tocks  given  away,  and  they  have  never  appealed 
ImJlofiS^f^L*''  ^^'  recipients.   But  if  you  have  a  man  in  your 
employ  whom  you  are  carefully  watching  and  encouraging  to  do 

hit^trjL^?//^?*  '°'*  °^  ^  way,  Vu  are  bound  ?!  make  a 
evLv  nL  ?n/5>,^®  ^^T"^  r^^  ""^^   watching  him,  and  if  there  is 

hliii?  lr?^!^®?^®i^P^t^  ^^*°  ^^^   envelope  an  increase  in  pay- 
he  will  work  for  that.  Just  the  same  as  you  and  I  did. 

inrr  +h=.-i-  =^>,f®®^  !°  emphatic  about  these  matters  that  I  am  extend- 
T  L^^l^^^!''®  ^^  "y  activities  more  and  more  as  time  goes  on; 
ooSt  o^^f  *^  "^^^  *^e  men  feel  that  in  their  adversity  they  can 
So^rac?  lU  L'^l''  \"'^"  who  sold  his  home  a  few  days  ago  In   a 
^nl5  ♦«'  '^"'^.^f  °^^^   to  nie  and  said  that  he  wanted  to  get  the 

?f  that  «SJi!?^  ^f*^®^  ^?^'^'  ^«  "^"^^-i  '"y  h«lP  *°  dispose 
Until   +h«  K  V*   I  n®ver  knew  anything  about  contracts,  so  I 

were  S^vJn!  ,^^^^  ^'^  ^f'"'"^  °^*  ^^**  ^^^^^^  ''®r«  "'en  in  town  who 
ISd  hS^i  f.^»^'^''^.°°^'^''*°^^*  ^^**  ^^11°^  unloaded  his  contract 

openef  up  ?or  SS!  ^"''^'  '^  *^'  ''""^^  '^"^'^^^  *^«  °»^^""«1«  ^ 

havinP  an  SeidiJSr  ?f^  ^  T^^  ^"  *^®  ^^P®^  ^^"*  °"®  °*  9ur  men 
Bh«  ?L  *«    5  !'i  4°  '^^®  ^'^^  ^^  ^'®r  ^y  an  automobile,  and 
tit   Jf?^J2  ^°  ;^°r-^®  hospital.   I  seno  for  that  mn  to  com4  to 
o-Jn^  ;^;^i«*l?'^  ^  gave  him  a  check  and  told  him  he  had  been  a 
v»r?H+^   ?\^^^  '^  and  that  we  wanted  to  help  him  out  in  his  ad- 

sSe  thing.  ^  "^^  ^^^*  *  °^^^^  ^y  '^®^*^'   ^"<^  ^  "^^"^  *^® 

=/s»^>,+  *-  i.  ^^^f  helped  men  invest  in  the  Company  when  they 
sought  to  buy  stock,   and  negotiated  loans  for  them  at  the  bank 

35-H 


I 


I 


That  is ^hv  the V  J^^  ?  ^5''°"  *^®  '"^"^y  entirely  from  the  firm. 
i*Ti  18  wny  they  paid  for  tnelr  stock  outright, 

earnines  that^S^mf^^hf ^^K^'^ ^^''^  ^'^^^  ^i^e  percent,   of  the 
two  yelrs  oJlv     ^  ™^\^^^f   ^"  *  °^«=^'      ^e  have  done  that  for 
bJnus  has   been'anrt  T^^^^S^''^  ^°-    ^  suppose,    but   I  think  the 
by  the  labor  1^^       °^  tabooed,   a.Ttbo  it  has  been  really  tabooed 

men*?hemse'?ve  'lill'a'So'nSs   'and  *S^  "^^  tne„>eelves;   I  ?hink  $he 
$75.00  or  lion  on  fw-  pC^"  f '   ^"*^  '^^^'^  ^^^  S-^^  *^«ro  a  check  for 
good.  *100-00  at  Christmastime  it  makes  them  feel  pretty 

I  have  had^men^L^!  *^^*  Personal  relationship   is  concerned: 
were  doing  th?n«nhJ?^ii^  "^  fJ  *°  ••   °^^*^i"  individuals  who 
benefit  Sf  the  f?rm    I,!^®^  °''°^*  "°*  *°'  *^^*   ^e^^  not  for  the 
I  had  establiahli     '  ?  5®^^  oecause  of  that  friendly  relation 
anS  can   »BiU"  i,d  -W  T^  ^ff^J^*"  *°  ^o  i:nto  the  factory 
boys  I  know       rof^?^-^!     !  ^"$  ^^^  *^®  ^®^*  o^  "^^e  names  of  the 
«Sn  who  ha  J*  h.  J.     ^^J®''  '^^^  ^  ^'®"*  °'-'*  *here,   »nd  there  was  a 

Sy  foreman       -SL  ?ni^"^  ""^  ^  "^^^^^  *°'  ^^  '^^^*«-     I  sai<i  to 
drill?"       '  ^^"^  *''®  y°^  eoing  to  keep  tUat  man  on  that 

to  save  mriiff^^t   *'-?'^'   }  °^'''*  P^*  another  man  on  that  drill, 
«  save  my  life,  that  will  turn  out  as  much  work  as  he  does." 

a  nan"wSo  Ss^S^t^o^''     ^  ^^^-^  demonstrated  several  times  that 

otSe?  fellow  tf?p.nff  °?  ^  *^-^^S  ^y  ^°"S  service,   usually  an- 

that  ho  vever  Jool  t2«>  ^l'"''^  ^"""^  ^?®^  ^^''^^'*     ^*  seems  to  n.e 

tc  do  as  quickl?  a*^l^t'^1'^°^**'^*  ^^^^^'   *h«  *»^i"S  for  you 
drill  an,i     ,^+  if        possiole  is  to  get  that  fellcw  off  that 

Sg  ip  ?o  him.-'     ^^-^^^^^^^e  else  wiiere  he  has  soue  new  li?e  open- 
act  upon  anybJdv^?  aLJLfi'xf  ^^^^^T'^^*®^*^'"®^  ^  foreman  won't 
tool- Joom     where  L     IS  f  -ion--and  he  put  that  man  into  the 
But  he  S' thorough! v"?. if  M^""^  t  ''^''  department  of  our  work, 
never  round  tiJkin^^oJJi^hi®^  ^^"^^^  ^l  ^^^  P°?*'   "ever  absent, 
titled  to  a  change!  factory,      ^fcy  wasn't  that  man  en- 


The 


whole  thing  comes  back,  so  far  as  1 


can  see,    to 


sser(s%-3ii?^?d--- -^ -- .ujd  acrin^ej 

Sr;eS°in?o  a  oorLr-Sntn   hp'hf-"^*'i  "?1  ^'^^*  '^"^^l  ^e  is 

corner,   uxitx]    ae  haa    :o  do  it  as  a  matter  of  salve, 

35- -H 


flr^J^hrLkefalrilnd!"*  "  ^''''^'"^^^ ■      »  ^^   S"3  the 


re 


r.«,.=«Iff;  ?•  *•  *'en<i*-   I  would  like  to  relate  something  on  this 
personal  contact  proposition. 

t4n«  »afl  ir^h4f*^f^^^^  *  superintendent  of  a  large  organiza- 
m^   rt  ^^  5^®  °^^^f?'  ^"^  *  ^"*1®  bell  rang  from  the  general 
B^JJ^^tw  ^hf"?^f  ^  ^"^°^'  ^"^  ^«  ^^«  called  in  thefe. 

th«v  tonv  ?J^^^  ^f^  ^   illustration  of  electric  trucks and 

J«  JL,!k  ^    "f"  ^^   **^^  ^°^  "^^^  ^sing  an  article  of  that  kind 
hS  f^?H  ^T?  ™°^\alO"g'   He  looked  at  them  for  a  rtoment,  and 

and  wa?k  Irn,^n)?  J^  ^•^.£°°'!  '^^^^^  S®*  ^^  °^*  ^^  your'chairs 
kSw  wiL  f«^J- *^-°"2v  *^^^  factory  once  in  a  while,  vou  would 
ti^n  «J!L  L^°^"^.°v  ^^^®'  y^'^  ^^^e  20  or  35  of  those  in  opera- 
tion every  day,  and  have  had  for  two  years.   My  resignation  is 
in  your  hands.  GooddayJ"  (Laughter.)  ^^ iavion  is 

„^.    .  That  goes  to  show  what  personal  relation  is.   You  have 

got  to  get  out  and  know  what  is  going  on.  There  are  in  many  of 
tnese  factories  managers  who  are  good  chairwarmers,  and  they 
don't  know  what  is  going  on.   I  think  I  am  getting  to  be  that 
way  myself, (laughter)--!  have  not  been  down  to  the  pump  shop 
for  four  weeks,  ^ 

President  Pank:  Mr.  McHugh.' 

discussion •"m^'hJ?®^®  ^^  ''?*  ''^^y  "^^^  ^  °°^l>i  ^^^  *<^  *his 
S^^n^^o  '  Mr.  Hall  has  explained  what  The  Goulds  Manufacturing 
Co^any'8  part  zs  doing  with  reference  to  bonuses.   We  have  not 

f  SnJf^^^^^^^i^.^''*''  ^^"^'^  ''^^^  ye*-  '^e  have  recently  built 
L^°l?i*^'  ^"'i^^ave  a  trained  nurse.   The  men  have  mutual 
benefit  associations. 

President  Pank:  Mr,  NewtonJ 

o*  o-.^'V^f''*°"/   ^'  Company  has  no  system  about  the  bonuses 
f  *v  *  T^J   *®  ^^^®  "^^e  substantial  increases  in  the  wage  rate 
in  the  office  and  shop.   We  have  a  sick-benefit  society  that  pays 
so  much  for  sickness  and  death;  and  the  company  meets  then  with 
an  equal  amounc  of  what  the  society  pays,   we  have  given  no 

wH«h  ;v,r+  ^r®  ""^^  ^''fJ'   suggested  that  they  buy  it we  sometimes 

vash  that  they  nad.   Our  payments  to  o^t  salesmen,  thev  are  on 
a  straight  salary  and  a  commission,  which  seems  very  satis- 

President  Pank:  Mr*  Hartliebl 

Mr*  Hartlieb:   Outside  of  increasing  the  salaries  of  all 
those  on  the  salary  list  in  the  office  and  paying  them  bonuses 
01  io  percent,  fcr  the  last  two  or  three  yearc,  ^ve  have  not  done 
much  although  vye  did  drop  the  bonus  system  about  three  months 
ago  and  paid  a  flat  increase  of  10  percent;  no  stock  bonus  or 
anything  of  that  sort.   We  do  some  welfare  v^ork  to  a  certain 
degree, 

37-H 


President  Pank:   1  hesitate  to  call  on  Mr.  West-  because 
he  may  tell  r.e  some  things  I  ought  to  do.  (Laughter.) 

Mr.  West:   I  would  advise  you  not  to  call  on  me. 

President  Pank:  Mr,  Peterson,' 

Mr.  Peterson:  I  haven't  anything  to  add. 

A  member:  You  might  call  on  Mr.  Nye.  He  has  not  spoken  yet 

President  Pank:   I  tried  to  follow  the  line,  and  I  forgot 
Mr.  Nye, 


Mr.  Peterson:   We 
might  just  say  that. 


are  on  a  straight  commission  basis;  I 


Mr.  Anderson:   I  would  like  to  tell  you  how  nicely  sometimes 
these  personal-tbuch  matters  ^loik   out,  nhen  things  seem  to  be 
iv  !"  i^°P®^®^^  position.   In  our  plant  the  operations  are  such 
that  the  men  who  attend  to  the  enginesring  room  have  some  test- 
ing of  pumps.   Somehow  or  other  one  of  these  men  had  called  for 
help  from  the  foreman,  and  the  foreman  had  not  given  it  to  him 
in  just  the  right  way  or  at  the  time.   They  got  disputing  and 
alter  a, little  it  got  all  over  the  factory  that  these  two  fellows 
were  at  loggerheads;  finally  the  superintendent  notified  me  that 
the  boys  had  got  scrapping,  and  that  "one  or  the  other  of  them 
nas  got  to  quit."  I  sent  for  the  one  man  to  come  to  the  office 
?f°2^C*^^-   *!"  o'clock;  then  I  sent  word  by  another  messenger 
to  the  otner  fellow  that  I  '/anted  to  see  him  at  ten  o'clock, 
T  oo^>.°  «n??;   "  happened  that  the  engineer  got  in  there  first. 
i  saia,   bill,  sit  down  and  .vait  a  minute,  I  have  got  something 
here  I  want  to  do. "  When  the  foreman  came  in  and  saw  Bill,  it 

T  ».„+  *^^5?^^^?^„^*^'Jl*   ^  ^^^'^'    "Sit  clown,  I  have  something  here 
i  want  to  imisn."  For  a  minute  it  was  very  quiet.   What  went 
tnrough  those  two  men's  minds  I  haven't  any  idea  of.   I  suppose 
they  thought  there  would  be  some  fur  and  feathers  right  there. 
J-inally  I  got  through  scribbling  on  something  that  wasn't  import- 
ant, and  I  turned  around  and  said  "Boys,  you  are  nothing  but  kids 

grown  old a  .nan  is  just  a  boy  grown  up and  you  have  been 

making  mountains  out  of  molehills";  I  eaid.  "Bill,  you  are  a 
good  workiaan,  and  I  appreciate  it;  yon  have  been  here  quite  a 
long  time;  we  look  upon  you  as  one  of  the  fa5:ily;  but  you  know 
that  Charlie  is  the  foreman  of  this  shop,  and  he  is  in  charge, 
and  that  whatever  we  do  >ve  must  do  through  him,  and  whatever  you 
do  you  must  do  through  him.   Now,  Bill,  I  don't  want  to  hear 
HP^  ^^r-Sle^^^ing  about  your  troubles  or  what  haiDpened.  "  I  said, 
onarlie,  I  don't  want  to  hear  your  storv;  but  I  vrant  vqu  two  to 

fS^°  V  ^"°  -"  ^'"'"  *^^  '"^^^  ^0'^  "o  tho  ether  end  of  the  shop, 
and  when  you  get  do>m  there mmd  you  must  not  dispute  about 

lyl^l       i?!:-,  ""!  ^^""P^y  ^^y  *N°*-  <^harl3e,  I  want  to  understand 
i»«^7n  ii5*-^\v*^^3®"'  ^"^"^   *^®  ^*^-er  -Well,  Bill,  what  do  you 
wantr   When  the  fellows  saw  those  men  coaing  out  of  the  office 
walking  down  there  arm  in  arm,  after  they  had  been  quarrelling 
♦vr^-^fi^   \®^°^  °*^®^  names,  they  knew  something  had  happened. 
that  those  boys  were  together.   I  was  anxious  to  find  out  how 

38-H 


the  thing  went,  so  I  went  out  in  the  factory  later  on  and  kind 

f  T,r     ^f?"""^  a  little  bit— and  there  they  were,  talking  just 
js^pleasantly  as  if  nothing  had  happened,  and  the  thing  wai  ill 

President  Pank:  Good.' 

Th6r«"l;p^2'^?f^°"L  ?*"**  ^?  ^^^*  ^  '"e^^  ^y  "personal  touch". 
f^llL^  \L      "  ""^f  ^'^  *"  institution  who  can  do  thatj  maybe  the 
itltT'^i.     V  si^frintendent  ,  the  efficiency  man,  welfare  man  or 

&'n|  thos^Singsr"*  ^'"'  ^^"'  ^"^  ^^^  '^^^^^  ^^°^^^  ^^  -^°- 

than  I^'th^^^fhi  ?'f''^'  .!®^H  ^^^^  discussion  has  gone  much  further 
reason  I^^SL"  "^^'u^'   ^*  '^^^  ^''^  ^^^^  interesting.   The 
Sah  t/  !^^^°''®''  ^''.'  ^®^^  ^'=^«  because  I  was  reall?  selfish 
enough  to  want  to  explain  what  we  (our  Company)  were  doing. 

is  rr^nn^r>Jl^*    ^It^^t^^   ^?°^®  °^   Salesmen's  compensation,  as  he 
iatS?J?iv  th  r*^  the  sales  organization,  and  as  I  am  also, 

a  Seat  L!?  nf°r^\f^''^K*'^  "^"*'  ^  ^"""'^   ^^^"^  "^  experiencd 
Lt  WH  f^  s^  .?'^°''^^®.'''^*''  *^®  matter  of  salesmen.   They  are 
w«\.«f^.  v^^"^^®'  ^°   ^^^  ^^  "their  loyalty  is  concerned;  but 
we  have  to  keep  up  their  interest.  . 

*«o+  +1,   "^^  system  that  we  have  worked  out  and  have  had  in  ef- 
+k!L   °^"^^^*  ^'^^   ^^^®s  organization  generally  for  the  last 
lirt,t   r"*'  and  certain  parts  of  the  organization  for  six  or 

eight  years well,  how  time  does  fly'   It  is  more  than  that 

on  fhfi^oi^^  1903---has  been  a  strait^ht  salary  and  a  percentage 
Ss  Sean  f^f^^'^'^T^^   !^^^''   '^^^  variation  from  most  systems  ^ 
his  own  mlnf^^r  ^  ""S*  ^®*  V^   minimum;  the  salesman  really  sets 
^^.l^^TJ^         '^'      ^®  ^^""^  ^  '^^sis  ^^   which  -;e  start  a  man,  and 
inf^f .f^  ^^^""^   °^  ^^^^'  ^^^*  ^"'^  191S'  -^hen  salesmen  were  want- 
8S^w^^^tPnH^^!?^*^^''^^y  ^"^   ^^'^  ^'°*  ^^^^  *°  "'^^e  any  increases; 
?S«r.rJ^^  ^  ^^^  ?^^"  ^''^^  *^e  entire  or  ganization^and  left 

rP«TSS  .  !  ^^""f  salary  and  paid  them  this  bonus well,  it  is 

the  allar?  In^'''^'  ""  ^^^^-^  «^'^-<^s.   A  certain  numbel  o^  JLes 
over  aid  Ih^,^f  tFt""^"   constitutes  the  minimum;  on  tne  sales 
Sn  a  Smhfn^+L  ^1  "^  P^-^  ^^^"^  ^  percentage.   So  that  they  are 
?L  of^o^^  *^°"  ^^''^'^-   co^ensation  and  percentage  basis.   In 
l^L°tll   ^^,so™e  men  the  ocrpensation  has  gone  qSite  high;  we 

anrpe^cent^pf  ?S-f  ?h:'^"^'  ^"'^'^'f  ^  ^ood  deal  2ore  in  f alary 
hav«^A^n^H  f       !  '®"  managerTs  salary  amounted  to  -  some 
of  our  br!?.^''-^"'  ^'^^'  *°  ^^"^   thousand  dollars.   The  managers 
Sf  ?ne  pro?it  of %'h  t^^   ^^'^  ""  ^  percentage  basis,-  a  percentage 
bv  Mr  llf-nl"     i   th^t^'^o^^se,  very  similar  to  whAt  vas  outlined 
oy  Mr.  Watson.   So  tnat  tnere  is  no  difficulty  there. 

Dlannin^  «J^  ^^""^  *^!®^  ^^   recognize  this  principle,  and  are 
eaJHaS  ^Jn  ^^"^  ^-^   """^  ^^^  °^*  ^^  ^^^  ^^  possible:   That 
resSlHrom  Ms  Jn'^t^^^  Participant  in  the  profits  that  may 
fZ  tlri^T^l       individual  effort,   we  paid  a  bonus  in  1917  at 
tae  end  of  t^e  year,  of  five  percent  on  every  one's  salary  except 

-39-H 


those  ?/ho  were  on  a  contingent  conpeneation  basis,  which  includes 
the  managers  and  salesmen,  as  I  have  just  described;  they  of 
course  were  participants  all  the  time,  they  got  a  percentage  of 
the  profits  and  also  a  return  on  the  sales.   Last  year  we  paid 
10  percent  bonuses. 

In  analyzing  this  thing  1  must  necessarily  look  at  it 
largely  from  the  sales  standpoint,  but  inasmuch  as  it  has  been 
very  largely  thrashed  out  in  our  meetings  during  the  last  three 
months,  I  v/ill  say  this:   There  are  three  grades  of  employees. 
I  am  now  expressing  a  personal  opinion.   I  agree  with  Mr.  ^7endt. 
The  workman  as  a  rule  is  not  appealed  to  by  a  bonus  or  by  sell- 
ing or  giving  him  stock;  he  is  appealed  to  by  something  that  comes 
into  his  envelope  at  the  end  of  the  week  or  on  payday.   That  goes, 
to  a  certain  extent,  beyond  the  strictly  production  man;  it  goes 
into  the  minor  salaried  employes  the  same  way.   Their  outgo  is 
too  close  to  their  income  to  be  appealed  to  by  that  sort  og  a  dis- 
tribution.  !*••  will  put  it  perhaps  oetter  this  way: 

It  depends  upon  the  length  of  the  vision  of  the  employe* 
To  those  who  are  able  to  lock  beyond  today ^s  pay  envelope,  either 
by  their  natural  inclination  or  by  the  press  of  their  own  im- 
mediate circumstances, — '     to  those  men  who  have  the  long  vision 
the  opportunity  to  buy  stock  at  a  price  somewhat  less  than  the 
market  price  appeals;  their  vision  carries  them  to  the  point  where 
they  desire  to  save  money,  and  they  think  more  of  the  declining 
years  than  perhaps  do  the  younger  workmen.   So  I  think  you  will 
find  that  in  the  long  run  there  will  be  a  differentiation  between 
those  two  grades  of  employes. 

I  think  one  speaker  rather  decried,  possibly,  the 
contributions  to  societies,  etc.   We  have  a  pension  fund,  which  I 
have  explained  to  some  of  you,  and  ^vhich  is  quite  elaborate 
and  extensive.   We  have  two  systems:   One  covers  the  salaried 
employes,  whether  in  the  sales  office  or  the  factories,  includ- 
ing of  course  foremen  and  superintendents. 

Everybody  in  this  class  contributes  to  this  fund  three 
per  cent  of  his  monthly,  annual  or  ^veekly  pay,  which  is  deducted 
from  it.   The  cornpany  contributes  a  like  amount  to  that  ftind, 

engages  so  to  do as  a  matter  of  fact  it  has  contributed  more; 

80  that  cur  pension  fund  now  amounts  to  about  half  a  million  dol- 
lars.  We  retire  men,  optionally,  after  a  certain  age at  60, 

optionally,  and  at  65,  corapujT.eory.   That  carries  death  benefit 
in  this  way:   If  he  does  not  live  to  be  60,  or  has  not  arrived 
at  30  years*  service,  he  does  not  get  the  pension;  so  we  have 
a  death  benefit:   At  five  years*  service  it  covers  six  months' 
ei-alarvV-  ^  •   '   y  seven  years'  service,  a  whole 

year's  salary.   Should  he  die  at  59  and  has  been  in  the  company 
43  years,  he  would  get  domble  the  amount  he  contributed  to  the  ' 
fund,  with  interest  adaed.   Any  emj^loye  leavin^  the  company, 
whether  dismissed  or  leaving  of  his  own  volition,  has  returned  tc 
him  the  full  amount  of  his  contribution  to  the  pension  fund,  plus 
simple  interest,  I  think  four  percent.   In  the  meantime  he  has 
had  the  insurance. 


40-H 


Mr.  Anderson:   Does  that  begin  immediately  upon  association': 

from  hiriocJjr^^^n^  J""'   ^"  ^"^^^^^  ^  "«^i°^l  certificate 
doctor.        '  ^"^  ^^  ™®  ^^®  ^°*  satisfied,  then  from  our  own 

exa»ina?!onr*   ^^^^'°'"  ^*  ^^  "°*  eligible,  due  to  the  medical 

When  tJrpe^nSLn'?;;Ad  Sl^S?  lltT^Z/'f'''^'  f'  ^^   ^"^^°y«- 
that  employes  on  our\avrn?^  .J  ?.®^£®'^*  ^®  ^^^  "°*  require 
kicked  out  in  case  th?J^H?H  ^?°"^^  ^*^il^  examination  and  be 
fund  is  a  trS8?!!!a«  r.i?/°^P^'^-  ^^   ^®  feel  that  that 
arate  from  the  com^Ly's  assets  1?°*^  *^"  fund^sentirely  sep- 
vested.   It  is  adrainister^rt  hi^^  *  Z^  ^   separate  fund  in- 
employees  of  the  coS^anv U^J^""®  trustees,  all  of  course 
is  no  part  of  the  cSanv.o  o  ^^f^  ^^®  ^®"i°r  employes,  and  it 
fund  if  a  t?u8t  and  SJt^  !  ^^^^^   ^*  ^^^'      "^^   feel  th4t  that 
ticlpation  in  tha?  til^cJ  "^  ^^""^  ""^   ^^Sht  to  admit  into  par- 

dra/upJn"ii?  wh?\ar^dr;i?riiUle%f ^^fn,'?.  ^  ^  ^^^^^^<^ 
we  have  had  plentv  nf  TZ^a^Z     '^   r-^^^-"-®  contribution  to  it.   So 

they  are  englged  todL  K?^®^  ''*'°  ^^^^  ^^"^   *"rned  down!   If 
that  they  mStf  pass  rohvaL^r  ^^P^y^^  ^^^^^^  the  understanding 
tlcipate  in  the'^pensLn  fu^d   !?^Sv*^°"  ^f^^""  ^^^^  °^"  P«- 
their  employment  ceases.  ^  '^  ""^^  ^^^^   i*  we  see  that 


pass 


the'pe^s'ion'^uS?  '^^'  '"^'^  ^"*°  ^^^^^  employ  who  do 


not 


examinf?iJn'?Jr''?he-*peSn'?Jnd  ^%°r*i"f«"*  on  passing  the 
fund  applying  to  ^he^ llltlVdrntk .  ""^   described  the  pension 

not  contribute^!?  Jn%St^tSpi°"  ^^^d  for  workmen.   They  do 
tions  as  I  have  luJt  deSriSf^  ^"^  subject  to  the  same  regula- 
Certain  length  of  lervicrin^'^.°°''^f''^''S  ^^^eir  eligibility 

at.   The  a«.?uSt  of  t^rplnSJn  ifdJti^  f^".'!?^'  tSey  may  arrive 
their  service.   We  takP  thf  ?2«  L*^^®-*"^"^^  ^^  *he  length  of 
interrupted  serviL  Sf.  ^^^^^^^  °^   continuous  servici,- 
with  us'^fiJe  ^elis  and  LaJes^^^^J;  ''°"  instance,  if  a  man  is 
come  back  again,  he  is  ab^o?,%^,/°^^'''  ^"^^^  *^^  decides  to 
are  concerned,  he  starts  n^i^!^^-°^*  ^  ^^-   ^^  ""^^   ^i'^e  years 
number  of  years  by  5JJ  aSd  th«f  J"*   ^f"  "«  multiply  the 
average  salary  fo^  th^'nSJin,^f  .f°'''"^  *^'  Percentage  of  his 
his  pension.   We  have  a  Ifmi?  n/l?  ^^r""^'   ^""^  *^*  ^«°o°>es 

explain on  the  thlorv  Ji«t  thf  ^*'°^?  ^^^  ^'^"^'  if  I  may 

oeived  compensation  oPmorethaSti-fr^^'^^^t^  ^^^^^  have  re- 
tion  to  make  some  savings  theS«iH'^*  ^!?°'^'*  ^*^®  ^^en  in  a  posi- 
care  of  themselves  in  thliroTr.r  ^S'^  '^''^  Prepared  to  taki 
tribution  to  tne  pension  finSfl«^liV^n^  instance,  my  con- 
cent of  the  maximm  of  14  SSo   lio^S*°°  *  ^t'''''    ^^^"^  ^   Per 
salary  check.   Should  I  ar??vra!?A2.*  "°?*L^^  deiuctiifrom  my 
-xn  in  the  em.lcy  of  th^-c^Ji^nl  l'^ig\^^e^S\?Ji\\--,o/ 

41-H 


.43  years;  multiplied  by  2,  that  will  be  86  percent.   At  that 
time  I  will  have  contributed  to  the  pension  fund  during  a  period 
of  about  15  years,  and  we  make  a  deduction  of  1  percent  for 
eaoh  year  that  the  employe  has  not  paid  to  the  fund»  That  was 
to  try  and  equalize  things  so  that  those  men  who  had  not  con- 
tributed to  the  fund  up  to  the  time  it  was  started  wo\ild  not  be 
on  exactly  the  same  basis  as  those  who  started  and  contributed 
all  the  time  to  the  fund  for  the  fiUl  30  years.   None  of  them 
contributed  to  the  fund  before  it  started,  but  they  get  credit 
for  the  full  number  of  years  of  service,  hence  a  deduction  of  1 
percent.   I  have  a  deduction  amounting  to  ^.ZO^o,   making  about 
80>,  net,  and  I  will  have  therefore  a  pension  of  about  $3300. 00, 
That  is  the  way  it  works  out. 

We  also  provide  that  should  an  employe  become  incapa- 
citated to  work  because  of  illness  or  injury,  after  15  years' 
service,  he  may  be  voted  a  special  pension  the  amount  of  which 
will,  of  course,  depend  upon  his  circumstances.   That  of  course 
is  an  elaboration  of  the  pension  fund. 

The  title  that  Mr,  Rohrbach  gave  to  his  address  was 
"Management  and  the  High  Cost  of  Living",  with  particular  refer- 
ence as  to  whether  there  had  been  proper  regard  for  the  toorgan- 
ized  part  of  an  organization. 

Mr,  Anderson:   I  wonder  if  anyone  has  had  any  experience 
with  group  insurance.   That  seems  to  be  a  matter  that  is  being 
pushed  by  the  old-line  companies.  Has  anybody  tried  that? 


A  Member:   There  are 
which  they  spoke  of  that. 


some  letters  Mr.  Rohrbach  read  in 


President  Pank:   We  have  not  tried  that.   We  donH  carry 
our  own  fire  insurance,  but  we  carry  all  our  liability  insurance 
ourselves,  and  we  have  a  specific  fund  for  that  for  which  we  set 
aside  what  would  be  the  premiim  required  to  take  care  of  it. 
That  is  becoming  an  asset  all  the  time.   We  found  in  our  factory 
that  by  carrying  our  own  insurance  it  brought  about  a  very  much 
better  system  in  the  factories  for  the  protection  of  our  workmen. 
T  4.v?^f®f  ^^®^^  is  a  good  deail  of  group  insurance  being  ^ne. 
i  think  it  is  a  very  w^se  provision,  if  the  conii^any  do  not  feel 
that  they  can  carry  that  themselves. 

}^   response  to  your  suggestion  about  beating  the 
lellow  to  It,  Mr.  Anderson,  as  Mr.  Wes'l;  can  testify  from  long 
experience:  I  do  not  pretend  to  know  how  to  handle  labor  such 
as  Mr.  Wendt,  Mr.  Nye  and  Mr.  Gardner  spoke  of,  because  I  have 
not  had  the  experience;  it  has  not  been  in  my  division  to  handle 
that  class  of  labor;  but  I  do  know,  in  handling  the  other  class 
or  men,  that  it  is  a  very  wise  thing  to  keep  in  touch  with  your 
payroll.   I  used  to  have  this  rule:   A  man  never  asked  me  for  a 

raise  m  salary  more  than  once he  asked  the  first  time,  and  1 

explained  my  principle  absolutely,  that  I  was  watching  the  payroll 

?hat  T  ^,,?i^K®^^  t?.^2?  ^'^®'  ^^^^   something  might  possibly  happen 
that  I  would  be  a  little  remiss,  but  when  he  came  to  the  oon- 

42-H 


^^l!^^°"^**^^*  ^®  ^^^  worth  more  money  if 
?i  ?/S^"4*®'^  ^i*  weeks  and  hadn^t'sJt 
llx^ivi\K^  resignation,    because   I^wo 

ea  me  for  an  increase  in  salary  and  alt 
got  it  Tinder  presgure  anH  ««+  v  ^  ; 


he  set  that  down  in  hi* 
ten  more  meanwhile,    then 
uld  never  be  more   than 
right  up  with  him  and  per 
if  he  came  to  me  and  ask- 
it,   he  would  feel  that  he 

was  deserved;   and  he 
I  have  got  very  few 


touch:     The  lack  of  ?hlt  ?« ^^^''L  ''°''l  keeping  in  personal 
estimation,   that  is  mor!  i!/''f^^^^y  *^^  O"®  fundamental,    in  my 
Situation  than  anythrn^%Ife^°*'?'*'^^  ^$^  *^«  P^^««"*  industrial 
employers  of  labor.     Of  co^rll'^K®*'^  f^^"  *^®  standpoint  of  the 
from  the  standpoint  of  the  emJiolof^®  ^^Y®  ^®®"  °*^®r  conditions 
had  tremendous  effect  upon  U^     ^ri^T^B^f^"'   «*<=• '  ^^at  have 
-—and  they  have  run  more  ^r.l\r.       .   \        ^®  ^^""S®^  organizations 
has  been  llss  and  iJss  Jf  th?  ^^""^  to  larger  organizations there 

on  the  right  trac\'f.SL°Joi1ef 0^2?"?^  Jo^^JffacJ^^Jyf^^  ^'^^^^^^^^ 

ay  present °S5tie8''ig^J^laGt^thJ^^'^''^  *!?*"  anything  else  in 
through  others,    for  the  sa?e  o?^L.^**^^^  ^'^^^  obliged  to  act 
organization;    I  cannS  ee?  fr,  5/*?°^^^^'^®  *"^  ^o^  *^s  sake  of 
like.      If  I  so   to  a  h;.ff^  t^  ^®  °^°^®  personal  touch  as   I  would 
oipline  if 'l^Sere  ?o  Jndertake'lo  tl  TT^"  ^^^olutely  upset'^Sx^? 
talk  with  him  about  his  cJnditin^o^     ^  2"!  °^  ^^^  "^^  there  to 
work;   then  the  manLer  «^n?H^^+^'    ^^"*  ^^^  ^®  ^^^Is  about  his 
so  keenly  that  Ki  le??  St     LnTr"\*°  anything.      I  feel  that 
appointed  a  manager  to  taVP  mv  ^P^i^'   ^^^re  I  was  manager,   and 
oany  friends  in  1?^  L?ui«  L7n^i^°^?*^^-®'   ^^^^^  I  have  k  great 

quently,    if  oSy  to  nlay  gS?     f  dff  iL^^'^Jf  '''f  *°  ^^*^^^  ^^'- 
two  years   1  did  not  o-o  L^+kI'   l^^^  "°*  return  frequently;    for 

to  the  Club  tni  fcol^ersef ?here'w!^h^Mm'  bJi'"'  ^^^^'^  ^^"'^ 
fairness  to  him,    to  ^et  Iwav  f ^«m  /k   *  '   P^cause   I  wanted  in 

whom  I  had  hiiek.      rfL  ZLil^.^^^J  organization,   everyone  of 
fortunate  who  caA  <ret   Jnt?  ff®**  deprivation,   and  the  man  is 

to  tell  the  othS  flliow  l£!'^r"*^  12'"''^'     '^®  ^««*  I  can  do  is 
personal  touch?  ^^^'  ^®  °"Sht  to  do  when  he  is  not  in 

request  •from%'hrfactiri%?r^Jhr?Jr^/*^^^''  '^°  °*"  Set  a 
the  thing  he  does  not  win t       ^f^  ^"^  he  wants,   ratner  than  for 

you  know  the  thoughts  rhai*«T.?H       ®r?'   ^"  °*^«^  '^^'^'   *hat  if 
in  the  factory?  Kheruiinn     <^^^f*rioaliy  opposed  to  your  own 
a  Channel  opeJ'that  2rin^^°\°J^^°*',J^«  JJ^^S  t°  do  is  to  ha^ 
thing  you  want  them  to  d^  wSpn^^!  *  ^"^2*  the  maiiager  to  do  the 
ask  for  something  ent?r??y  dS^ren?.      **^^  °^  ^*°*'    ^^^^  "^g^* 

President  Pank:     Very  true. 
in  some%uSh'[ns?;ncesr^^'^  *^^"^  *^^'  '  ^*^«  ^^^'^  successful 


-43-H 


T  thi^r  "^v"*  ^^^*   ^  *^^"^  **^ere  is  a  difference  in  handling, 
wn^v  »i*K  4   r!  ^  different  situation  and  a  different  class  to 
woric  with  in  the  sales  organization  than  in  the  factory. 

Mr,  Anderson:   Oh,  yes, 

n«t*>J''^!^'*^"*  ^^^y-      "^^^^   ^«  ^^y  T  say  that  I  do  not  feel  com- 
petent to  say  anything  on  the  factory  side, 

Drettv'',;norJho*o  ^  "^^^^  ^^^  ^^^   ''«  h*^e  i"  o"'  pension  plan 
in  exLr^t  J«  ^^®  arrangement  as  you,  although  we  do  not  have 
tervi^^  h*i  :  and  we  have  3  percent,  a  year  f§r  each  year's 
Xn  Re?'on?i  7S  ^^""^  f*  "?  *°  ^^'^/^  years;  in  other  words,  one 
last  ten  v«Ll  ^I'^'T^'    "^  ^^^   average  annual  earnings  for  the 
xast  ten  years,   w©  do  not  limit  the  amount  we  earn. 

rulin^rof*^o5r  It^V-      ^®  °J   *^®  ^^^«*  "6"  "^0  oarae  under  the 
fraction  Lo^f  pension  system  was  a  man  who  had  served  49  and  a 

oS  B^Sd  asJpH  ?h%°^  °"^  vice-presidents,  and  the  chairman  of 
man)  we  'vat?p  fho*"^*  f?  a  special  favor  to  him,   to  the  chair- 
casi:  Jntil  JJ  «hn,n5^i^°^^^°"  °^   *^«  pension  rule  in  that  man's 
it  would  i:  J®  ^*^°"^?  ^^^«  completed  his  50th  year.   He  thought  i 
The  Herein?  rf.L''-°t   ^^^S^  to  have  him  complete  his  50th  year 
have  19  Der«p;/  i^.'°^5^*  $4,000.  pension  for  him,  but  he  had  to 
pen^iJn  ?KSt  felJo^*'^'  '"^'°'  ^'''   ^'"^  ^^^'  ""^^^"^  the  actual 

draw  wo^f  Sl'S?lmaIel%1JjS.S?""*  ''   "^"^^  ^"  ^"^^°^^  °^^ 

throuJrhif?if«^"«n^  '^i^L^^  P"  y®^'-      That  pension  continues 
^arougn  nis  life,    and  at  his  death  onn-hAif  t.ho  «*r,<=<«r.  ^«^*««.. 


to  his  widow,   so 


long 


death  one-half  the  pension  continues 
as   she   remains   a  widow. 


44-H 


COMPRESSED  AIR  SOCIETY  MEETING 
September  36^  1919 
oOo 


After  the  Secretary  had  preeented  the  data  he  had 
collected,  8ubstam;:;ally  as  recorded  In  the  minutes  of  The 
Hydraulic  Society  meeting^  and  as  shovm  on  pages  1-H  to  26-H 
herewith,  the  following  discusaion  took  placet 

Mr»  Jones:  Wbuld  it  be  possible,  Mr.  Rohrbaoh,  for  you  to 
reduce  those  letterc,  without  too  much  labor,  into  a  schedule 
which  could  be  written  up  and  sent  to  us? 

The  Secretary:  Yes,  Mr.  Jones;  it  is  just  a  question  of 
whether  to  copy  each  letter  or  to  give  a  digest,  or  summary  of  it* 

Mra  Jones:  1  think  we  have  all  got  this  proposition  before 
usv  Most  of  us  have  to  put  these  various  schemed  up  to  our 
Executive  Board,  or  to  the  people  who  are  going  to  take  the  final 
action,  and  they  like  to  see  what  other  people  are  doing;  and  it 
seems  to  me  that  the  more  information  of  that  sort  we  can  get, 
the  more  It  will  help  us* 

Ui.   Albin:  Our  President  has  had  one  of  his  men  gathering 
that  kind  of  information  for  a  year. 

The  Secretary:  How  would  it  do  to  insert  in  the  record 
the  names  of  the  concerns  from  whom  replies  have  been  received, 
then  the  letters  could  be  copied  in  the  record  without  'identify- 
ing them  with  the  names  of  any  particular  con5)any? 

Mr«  Jones:  I  think  that  is  very  good. 

Urt  Albin:  Send  us  whatever  data  you  have* 

« 
The  Secretary:  The  concerns  who  have  written  me  are  very 
ttuch  interested  in  the  subject t 

Mr*  Wall:  You  would  be  doing  a  good  thing  in  distributing 
that  information. 

STOCK  OWNERSHIP  BY  EMPLOYES 

Mr*  Reynolds:  Is  the  Underwood  stock  actually  issued  to 
the  employes? 

The  Secretary:  The  stock  is  actually  issued  to  them,  and 

36-0 


r 


as  an  inducement  for  the  empj^oyes  to  hold  the  stock,  the  Company 
gave  an  extra  dividend  for  the  first  two  years  equal  to  the 
regular  dividend  to  all  men  who  still  were  holding  their  stocky 
They  also  have  a  rule  prohibiting  a  man  from  selling  his  stock 
without  the  consent  of  the  trustees  under  a  penalty  of  not  shar- 
ing in  the  distribution  for  the  succeeding  year,  or  for  the 
current  year. 

Mr.  Reynolds:   Those  are  all  inportant  points, 

Mr#  Jones:   That  stock  probably  has  to  be  bought  on  the 
market,  because  very  few  companies  would  carry  unissued  stock  in 
the  quantities  that  would  be  needed  under  such  a  plan, 

Mr,  Copeland:   I  was  reading,  last  night,  an  article  by 
George  W,  Perkins  on  the  desirability  of  a  stock  issue  to  em- 
ployes as  against  a  bonus* 

Mr#  Jones:  Our  people  had  to  go  out  and  buy  on  the  market 
the  stock  that  they  have  distributed* 

The  Secretary:  The  advantage  of  distributing  profits  in 
the  form  of  stock  is  that  in  times  like  these  a  Company  is  some- 
times pretty  well  tied  up  on  resources,  and  can  probably  use 
the  money  in  the  business  that  is  tepreeented  by  the  profits  and, 
therefore,  they  are  building  up  a  reserve  by  capitalizing  the 
profits  instead  of  making  a  cash  distribution, 

Mr,  Albin:  They  are  also  building-  \5>  a  dividend  liability, 

Mr,  Copeland:  After  the  dividend  has  been  paid,  there  is 
a  certain  amount  of  surplus  turned  into  stock,  and  if  this  re- 
mains in  the  business  it  gives  them  a  continuing  interest, 

Mr,  Albin:   We  practically  followed  Perkin*s  scheme  of 
stock  distribution.   In  the  office  or  management  class  the  stock 
was  kept,  except  in  oases  where  a  man  severed  his  connection  with 
the  company,  but  the  rank  and  file  of  the  shop  employes  acted 
very  differently,  A  very  large  percentage  of  those  people  turned 
their  stock  back  and  never  completed  their  payments, 

Mr,  Reynolds:  They  always  will  do  that.  They  do  not  want 
to  be  partners, 

Mr,  Copeland:   We  sold  our  stock  to  our  employes  at  par, 
and  our  only  provision  has  been  that  anyone  who  sold  the  stock 

??.  ^v?!^^^  set  an  opportunity  to  subscribe  again,  and  practical- 
ly nobody  has  let  his  stock  go, 

o^^^i^^Iv.^?^?^-''^'  "^®  anybody  found  that  a  workingman  wants 
stock;  that  he  considers  it  of  value? 

Mr,  Copeland:  We  have. 


37-0 


Mr#  Reynolds: 
in  cash  every  week. 


My  iopresslon  is  that  he  wants  his  dividends 


Mxt  Jones:  Have  ^you  not  got,  Mr*  Copeland,  up  in  your 
factory  at  Claremont  a  little  different  element  than  the  most 
of  \is  have  in  our  factories  that  are  in  or  near  big  cities? 
Haven •t  you  an  element  that  is  born  and  raised  there  largely 
and  vrtio  are  a  little  more  inclined  toward  thrift  and  investing 
their  savings? 

Mr,  Copeland:  We  have  just  had  a  surprising  experience. 
We  have  not  analyzed  it  yet*  At  the  last  offering  we  had 
relatively  more  subscribers  among  our  Chicago  employes  than  we 
did  among  our  Claremont  employes. 

Mrt  Albin:   It  worked  the  other  way  with  us. 

Mr*  Copeland:   I  expected  it  to  work  the  other  way  and 
cannot  account  for  it  yet.   We  have  had  to  limit  the  men  to  five 
shares  each  ~  the  offer  was  so  largely  oversubscribed  that  we 
limited  them  to  five  shares.   If  anybody  wants  to  pay  for  it  on 
the  twenty-payment  plan  we  let  them  do  sOj  paying  them  interest. 
I  cannot  help  but  think  that  all  these  things  are  intangible* 
You  cannot  tell  until  a  crisis  comes,  but  I  am  optomistio 
enough  to  think  it  helps*  r 

Mr»  Reynolds:  The  trouble  is  that  the  men  do  not  want  to 
share  in  your  losses  if  any  should  develop.   If  you  were  sure 
that  you  were  always  going  to  pay  dividends,  that  would  be  all 
right,  but  you  have  lean  years  and  capacity  years.   The  lean 
years  usually  predominate,  and  the  workingman  is  not  willing  to 
share  that  loss  and  if  the  stock  falls  in  value  or  does  not  pay 
dividends,  he  thinks  he  has  been  buncoed.  He  wants  his  dividends 
paid  and  he  mistrusts  your  bookkeeping  and  everything  else. 

The  Secretary:   A  study  of  the  pamphlet  that  the  Government 
has  issued,  in  which  they  investigated  a  number  of  cases,  seems 
to  indicate  that  that  is  the  general  result  of  stock-ownership 
schemes  and  bonuses;  that  they  are  a  failure  as  far  as  the  shop 
element  is  concerned. 


them. 


Mr.  Copeland:  I  think  that  is  where  we  have  to  eliminate 


The  Secretary:  The  Proctor  &  Gamble  Company  of  Cincinnati 
are  about  the  most  successful  in  that  respect  of  any  concern  I 
know.   They  have  a  very  liberal  stock  o^vnership  plan  that  has 
been  in  successful  operation  for  many  years,  but  most  concerns 
as  a  rule,  do  not  find  it  a  success  in  the  plant. 

Mr*  Jones:   With  respect  to  the  Larkin  plan,  I  should  feel 
in  that  case  that  if  an  employe  paid  any  real  money  for  that 
stock,  he  was  buying  a  highly  speculative  stock  for  good  dol- 
lars. If  it  is  given  to  him,  it  is  a  different  proposition. 

38-C 


The  Secretary:   It  is  given  to  him  as  a  stock  dividend  now 
and  then  hereafter  a  share. of  the  profits  will  be  given  appar- 
ently out  of  the  treasury  stock* 

Mr.  Reynolds:   Just  like  any  other  stock  dividend;  after  it 
is  issued  it  shares  in  the  profits. 

J^T.   Jones:   But  this  stock  seems  to  have  little  or  no  basis 
in  its  assets* 

Mr*  Reynolds:   But  it  is  the  same  kind  of  stock,  is  it  not? 

«4.  ^i'^nn'^^?^®*  ^^*   '^^^y  issued  the  Preferred  Stock  for  sub- 
stantially the  total  valuation  of  the  plant* 

Mr,  Reynolds:   I  see.   This  is  camraon  stock  that  is  dis-^ 
tributed* 

Mr,  Jones t  Yes,  and  it  participates  only  in  the  sucoess 
or  the  company.   It  has  no  assets  behind  it, 

BONUSES 

t 

-<*h  if'    '^°i|®f  •   ^^^^  has  been  the  experience  of  the  members 
with  respect  to  boniises? 

cnr.no!f«'  •  ^yf°l<^;     ^^^  Company,  along  with  practically  every 

wa?     Inrf  2>,I^ii''^''^®^,f^!^^^^^*'®^  ^  ^"^8  system  during  the 

r  ?A+^7  I?^??  "®  abolished  about  thirty  days  ago,   to  get  rid  of 

?he  ipSnn?*°^^rP'"f  *^^*  ^*  involved,   and  idded  the  aSounrto 
the  regular  rates  of  pay, 

upon  comDll5?nn^«?  ^  ^^  7^®  originated  gave  a  ten  percent .   bonus 
aSa?t«r^;ri^     °^*  y®^""^  service.      This  was  paid  in  part  each 
ilrl  tf  K?"^  ^  employe  who  did  not  remain  a  full  year  ibst  a 

?he\fbor'?uSoT;.    ''  """  "°'  '^'P  '""°''  ^°''^^^^'   '-  ^'^-?"e 

..amo  "^i.  "^o^es:     Our  Company's  experience  was  practically  the 

sSp^  relliy  Sok^if  ?"  S^'  *^e.°"^y  *^^"S  *^^^  the  me^ in  the 
bonSLrare\i?«^  T  ^^  ^^f  "^^^^^  ^^^  envelope,   and  1  know  that 
oonuses  are  being  dropped  in  a  great  many  cases. 

hij^h  oJ^t^n?"?^*??*     ^!  ^"^  ''^^  established  to  help  meet  the 
pefmanenJ  oLiJ^J"^  ^"^  ^%  *^^*  ^^^^^  *o  ^e  practically  a 

Srpur?ntr??r sa?ar?es. °'"^""^  ^'°'^^^  '^"^  "  "^^^^  ^  ^^^^ 

8hop8"b^t°Sv«^?'„.°"^'^°'^^"y v*'^^®^  °"*  ^  ^°"^s  plan  in  the 
b^§Sie^\f^^^Hnno;7r?heTw?^d  ^?a?^^'*  °^^^  ^^^*  '' 


39- C 


n* 


We  still  have  a  modified  form  of  the  system  in  effect^ 
by  which  a  bonus  is  given  at  the  end  of  the  year  to  anyone  who 
has  put  in  special  efforts.   A  certain  lump  sum  is  voted  for  this 
purpose,  the  distribution  of  which  is  in  ray  hands,  and  no  one  else 
knows  the  basis  upon  which  it  is  made% 

Mr«  Reynolds:  Our  Conpany  has  a  limited  profit  sharing  plan 
in  effect,  the  amount  of  which  varies  according  to  the  Company's 
dividend  rate.   The  division  is  made  among  certain  enployes  in 
the  offices  euid  shops  upon  whom  really  depends  the  ability  of  the 
Conqpany  to  make  a  profit.   It  is  called  our  Class  "B"  Fund  and 
has  amounted  to  approximately  14^  of  the  salaries  paid  the 
participants. 

Mrt  Jones:  We  are  all  tip  against  the  proposition  of  taking 
care  of  the  salaried  employes  in  some  form  or  other  and  I  be- 
lieve the  solution  is  some  scheme  by  which  they  will  share  in 
the  profits,  although  not  on  a  fixed  basis. 

Mr.  Reynolds:   In  the  past,  we  were  always  able  to  get  a 

lot  of  the  young  fellows  out  of  the  shop  into  the  office but 

we  cannot  get  them  to  come  now.   They  get  twice  as  much  money  in 
the  shop* 

Mr.  Jones:   The  rates  have  gone  up  faster  there  than  in  the 
more  desirable  salaried  positionst  Of  course,  the  answer  to 
this  fftiole  situation  is  in  the  future.   I  cannot  but  believe 
that  we  are  going  to  drift  into  a  time  when  there  has  got  to  be 
some  change.  How  it  is  going  to  come  about,  I  cannot  tell;  but 
we  all  know  that  our  success  in  this  country  is  largely  wrapped 
up   in  the  export  business.   We  have  got  away  be^'-ond  the  point 
where  we  can  absorb  all  we  produce.   We  have  got  to  ship  in  the 
neighborhood  of  about  three  billion  dollars  worth  of  material 
abroad  yearly.   Well  now,  we  are  not  going  to  ship  any  three 
billions  with  the  prices  we  are  having  to  get  now,  as  soon  as 
the  countries  abroad  can  resume  productions,  and  they  are  re- 
suming very  rapidly.   I  think  Germany  will  be  underway  very 
shortly.   These  things  you  read  in  the  papers  about  her  disor- 
ganization are  all  fakes.   I  have  reports  from  Germany  that  her 
industries  are  running  very  smoothly.   It  looks  like  the  moment 
we  have  fully  supplied  the  demand  (LA  this  country  as, though  we 
were  going  to  come  up  pretty  suddenly  against  a  condition  that 
it  is  going  to  be  hard  for  us  to  solve, 

MTf  Copeland:   But  we  have  got  to  pay  these  people  enough 
to  live  on  and  give  them  a  chance  to  save  some  money. 

Mr.  Jones:   DonH  you  think  we  are  going  to  approach  one 
or  two  years  in  which  the  manufacturer  has  got  to  be  satisfied 
with  very  poor  returns?  We  are  not  going  to  be  able, as  I  see  it, 
to  decrease  the  wages  first.   That  is  going  to  be  the  last  thing  . 
Do  not  decrease  the  wages  first.   We  have  got  to  meet  competi- 
tion abroad.   We  have  got  to  meet  it  if  we  want  to  get  rid  of 
our  surplus,  and  if  we  do  not  get  rid  of  our  surplus  we  are  go- 

30-C 


r» 


JSSno?  b^m^^n Jf°*5'^®®  ^*  seventy  per  cent,  therefore  profits 
cannot  be  maintained  as  at  present, 

hill-  «o  I^» '■'■"'   "'^l.''^  course,  we  have  not  approached  that  yet. 
but  we  are  approaching  it  rapidly,  >-  yo*-. 

Mr«  Reynolds:  When  you  say  "rapidly",  what  do  you  mean? 
Mr.  Jones:  Probably  in  1930. 


PENSIONS 

for  «m.^i^fj®^^v"®®'*  "*^®  *^"y  «>^  *^e  members  any  plan  for  pensions 
for  employes  who  grow  old  in  the  service? 

it  sinJe  1914^^""^*  '^^  ^^""^  ^  definite  pension  plan.   We  have  had 
is  endJd?^"^^^"^®''*  ^^"^  ''®*"®  *^®  "®"  ''*^®"  *^®^'  usefulness 

serviSp'o?^!!^?*  '^^^^^^^  ^^^"^  ^^  option  of  lengthening  their 
thSs!  We^iri^f;.  ^^^  ^^   ^°^*^"  °"«  °^  ^^°«^  intanfible 
cidef?  insSrScef     ^  ^^^  expense.   We  also  carry  our  Iwn  ao- 

more  vain^Ml^J?! '   ^*,ftrikes  me  that  a  pension  system  is  really 
?Se'oSrmin  veJy  ^Sh!'"'^*^'"^'  ^'  ''   ^^'^^^^^  *^^  ^^^^^^  ^^ 

that  hp'hS"!^*  I*  appeals  to  a  man  after  he  becomes  fearful 
lltlA^   w  ^"^J^A^  P°^"*  ''^^^  ^i«  services  can  be  easily  dis- 

reached.'  ^^''°^'^^'     ^°'   ^^   '^^s  not  at  all  until  that  period  is 

be  t£lk   cSriJ^'^theLlira^er  ^  ^''^""°'  *^"*  *'^^  ^^^ 

uercentla^^^^fJ!'^?      ''^^^  "^   "^  ^^*  *  definite  payment,   a  certain 
d?  So?  h!v«  L*^^'^^^^^y  ^°'  ^  certain  period  ot  time;  so  you 
SoSll  pay!         ^"««*io»  i"  your  own  mind  as  to  what  penlion  you 

reaches'thf  aL  S*Sr,*J®   Fairbanks-Morse  Company,   after  a  man 
reacnes  tne  age  of  60  he  can  voluntarily  retire. 


Mr,   Copeland:     We  have  a  voluntary  system, too. 
Mr,  Wall:      Do  the  emjiloyes  contribute  to  it? 

31-C 


V 


Mr,   Copeland:     No. 

Mr,   Wall:     At  the  Fairbanks-Morse  Co.   the  salaried  vvorkers 
do  amd  the  wage  workers  do  not  contribute. 

« 

Mr.  Copeland:   We  patterned  ours  after  the  American  Telephone 
and  Western  Electric  Conqpanies  plans,  modified  to  suit  our  con- 
ditions. 

Mr.  Albin:   The  Fairbanks-Morse  Co.  puts  in  dollar  for  dol- 
lar  whatever  the  employe  pays  in,  they  put  in  an  equal  amount. 

Mr.  Pressinger:   The  employes  remain  with  you  because  they 
cannot  withdraw  what  they  have  put  in# 

Mr.  Reynolds:   I  think  the  law  would  give  them  that. 

. .  ^J^^*   Jones:   They  would  only  be  withdrawing  one-half  the  funds, 
II  the  employes  pay  in  half  and  the  company  puts  in  half.   The 
Insurance  Lav/s  would  give  them  that. 

v^^'  *^11*   Three  percent,  per  annian  on  four  thousand  dollars 
is  the  highest  any  man  would  pay  wi+ii  the  FcdrbtokAeMorse  Co. 

Mr.  Copeland:   We  carry  our  own  accident  insurance. 

Mr.  Wall:   Do  you  carry  any  group  insurance? 

Mr*  Copeland:  No,  but  we  carry  our  own  accident  insurance, 
ana  the  accident  companies  tell  us,  now  and  then,  what  an  awful 
risk  we  are  taking;  but  it  is  very  much  cheaper  and  we  have  the 
privilege  of  settling  with  our  own  men.  With  the  old  insurance 
schemes  you  usually  have  a  fight  and  they  pay  as  little  as  they 
can.   On  the  whole  it  works  out  very  well. 

Mr.  Jones:   You  always  felt  they  did  an  injustice  and  you 
were  paying  for  it. 

Mr.  Copeland:   Yes,  and  it  male  it  very  hard  for  one  of  our 

superintendents  to  collect  evidence  for  the  insurance  company, 

to  enable  them  to  beat  the  man.   That  is  the  way  the  thing  worked 
out . 

The  Chairman:   Does  that  conplete  everything  you  have  to 
present  on  this  subject,  Mr.  Secretary? 

The  Secretary;  Yes. 

sav  -h^!  S^^^n""."!  ^^^^'   ^  ***^"^  ^  spea^  ^or  iall  of  us  ^^en  I 
say  tnat  Mr.  Rohrbach  has  uncovered  a  vast  amount  of  valuable 
iniormation.   He  will  present  summaries  of  it  and  give  us  some- 
oj  T^,i^  think  oyer  and  digest  at  our  leisure.  That  is  the  plan 
as  I  understand  it. 


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Hydraulic  society 


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Management  and  the  high  cost  of 
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